Good News : JK Bank Is Giving Loan To Farmers At Very Low Interest Rates: Jammu and Kashmir Bank can provide subsidized loans to farmers under the Interest Subvention Scheme of the Centre as it is a public sector bank.

The Finance Ministry has announced that Jammu and Kashmir Bank can provide subsidized loans to farmers under the Interest Subvention Scheme of the Centre as it is a public sector bank.

Jammu & Kashmir Bank, being majority owned by the government of Jammu & Kashmir, is also a public sector bank as per Section 617 of the Companies Act,” the Finance Ministry said in a letter.


“It has therefore been decided that the Interest Subvention Scheme on short-term crop loans will also be applicable for lending done by the bank as long as the Jammu & Kashmir government retains a majority stake in the bank,” it said.

The Jammu & Kashmir government owns a 53.17% stake in the bank, incorporated in 1938. The bank has 442 branches in the state and 354 ATMs.


The government of India has been implementing the Interest Subvention Scheme since 2006-07 to ensure that short-term crop loans up to Rs3 lakh are available to farmers at a concessional interest rate of 7% per annum, irrespective of the prevailing market rate. The scheme is applicable to public sector banks, regional rural banks and cooperative banks.


In his Budget speech, Finance Minister Pranab Mukherjee had said the existing interest subvention scheme for providing short-term crop loans to farmers at 7 per cent interest will be continued during FY2011-12.

Additional 2 per cent interest subvention to those farmers who repay their crop loans on time. The response to this scheme has been good. In order to provide further incentive to these farmers, I propose to enhance the subvention to 3 per cent in 2011-12," Mukherjee had said.


Accordingly, the effective rate of interest for such farmers will be 4 % per annum, the Finance Minister had said.

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