About Central Interest Subvention Scheme

• The Central Interest Subvention Scheme provides Short-Term Agriculture Loans of up to ₹3 lakh to farmers involved in agriculture and allied sectors, such as animal husbandry, dairy, poultry, and fisheries, at an annual interest rate of 7%. Farmers who repay their loans promptly are eligible for an additional 3% interest subvention (Prompt Repayment Incentive - PRI), reducing their effective interest rate to 4% annually.
• The Government of India supports this scheme by providing 100% interest subvention to the financial institutions (including HDFC Bank) administering the loan. It is the second largest scheme by budget and beneficiary coverage in the Department of Agriculture & Farmers Welfare (DA&FW).
• Interest Subvention Scheme for Kisan Credit Card Loans
• Under the scheme, banks offering credit support up to ₹3 lakh to Small and Marginal Farmers (SF/MF) with Kisan Credit Cards receive a 1.5% interest subvention, resulting in an effective annual interest rate of 7%.
• In natural calamities, this subvention extends to restructured loans for affected farmers, varying relief duration based on the calamity's impact.
• Farmers who repay the loans on a timely basis can benefit from an additional 3% interest subvention, lowering their effective annual interest rate to 4%.
• The scheme applies to public sector (PSBs) and private sector (PVBs) for loans issued by their rural and semi-urban branches only.