In line with the government's policy decision, RBI today said, farmers can avail short-term crop loan of up to 3 lakh rupees at subsidised interest rate of 7 per cent and the rate could go down to 4 per cent if they repay promptly.<br/><br/>The RBI said in a notification issued today that a financial support of 2 per cent per annum will be made available for short-term crop loan up to 3 lakh rupees per farmer, provided the lending institutions make available short-term credit at the ground level at 7 per cent per annum to farmers. It added that an additional interest subvention of 3 per cent per annum will be available to the prompt payee farmers.<br/><br/>RBI said that the farmers paying promptly would get short-term crop loans @4 per cent per annum during 2016-17. This benefit would not accrue to those farmers who repay after one year of availing such loans. <br/><br/>In order to discourage distress sale by farmers and encourage them to store their produce in warehouses, the subvention will be given to small and marginal farmers with a Kisan Credit Card for a further period of up to six months post-harvest on the same rate as available to crop loan against negotiable warehouse receipt.<br/><br/>To provide relief to farmers affected by natural calamities, the interest subvention of 2 per cent will continue to be available to banks for the first year on the restructured amount. Such restructured loans may attract a normal rate of interest from the second year onwards as per the policy laid down by RBI.