Reserve Bank of India has asked all banks to provide interest concession of 2 per cent on short term crop loans of up to 3 lakh rupees. In a notification issued from Mumbai yesterday, the RBI said that interest subvention of 2 per cent per annum will be made available to public and private sector banks provided they lend short term credit at the ground level at 7 per cent per annum to farmers. The government in the Budget for 2015-16 has proposed to implement interest subvention scheme in the current fiscal for short-term crop loans up to 3 lakh rupees.<br/><br/>The apex bank has said that additional interest subvention of 3 per cent will be available to farmers for repaying the loan promptly from the date of disbursement of the crop loan. This implies that farmers paying promptly would get short term crop loans at 4 per cent during the year 2015-16.<br/><br/>To provide relief to farmers affected by natural calamities, the Reserve Bank has said that interest subvention of 2 per cent will continue to be available to banks for the first year on the restructured amount. However, such restructured loans may attract normal rate of interest from the second year onwards.