New Delhi, June 1 (IANS): Extending relief to the farmers amid the difficult time of the Covid-19 pandemic, the Union Cabinet on Monday approved the extension of repayment date for short term loans for agriculture and allied activities by banks which have become due or will become due between March 1, 2020 and August 31, 2020.

The Cabinet, chaired by Prime Minister Narendra Modi, on Monday gave its approval to extend repayment date upto August 31 for standard short-term loans upto Rs 3 lakh advanced for agriculture and allied activities by banks, which have become due or shall become due in this period with continued benefit of 2 percent Interest Subvention (IS) to banks and 3 percent Prompt Repayment Incentive (PRI) to farmers.

This decision will help the farmers to repay/renew such loans upto the extended repayment date of August 31 at 4 percent annually, interest without attracting any penalty and thus help them in avoiding travelling to banks for such renewal during this pandemic period, Union Agriculture and Farmers Welfare Minister Narendra Singh Tomar said in a media briefing on the cabinet decisions.

The government provides concessional Standard Short-Term Agri-loans to farmers through banks with 2 percent p.a, interest subvention to banks and 3 percent additional benefit on timely repayment to farmers thus providing loans upto Rs 3 lakh at 4 p.a. interest on timely repayment.