RBI Notifications

Interest subvention should be phased out: central bank panel


The government must do away with the interest subvention scheme and plough back the subsidy into a universal crop insurance scheme for small and marginal farmers.

  1. The move can transform the agriculture sector and promote financial inclusion, according to the panel headed by Deepak Mohanty, executive director, RBI.
  2. Digitisation of land records for clear titles and credit linkage are necessary to establish evidence of cultivation.
  3. There is a specific purpose of subvention where farmers receive loans at a lower cost with the government paying the balance.
  4. In order to ensure actual credit supply to the agricultural sector, the committee recommended introduction of Aadhaar-linked mechanism for Credit Eligibility Certificates.
  5. The Mohanty panel noted significant financial exclusion continue to persists in the north-eastern, eastern and central states to achieve near-universal access.

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