State Department Of Agricultural Marketing Has Directed Banks To Speed Up Funds Disbursement Under Centre's AIF Scheme

The Department of Agricultural Marketing for the state has instructed banks to accelerate the process of disbursing funds through the AIF Scheme provided by the government.

During a meeting of the Tamil Nadu 'State Level Bankers' Committee' (SLBC), officials from the State Department of Agricultural Marketing and Agri Business urged banks to expedite the disbursement process for the central government's Agriculture Infrastructure Fund (AIF) scheme.

The officials noted that while banks have sanctioned a sum of ₹548 crores under the scheme, only ₹331 crores has been disbursed so far.

On July 8, 2020, the Centre initiated a financing facility known as AIF. The purpose of this facility is to facilitate the development of post-harvest management infrastructure and community farm assets. The scheme provides a 3% annual interest subsidy for a maximum of seven years, up to a limit of two crore. For loans exceeding ₹2 crore, the interest subvention will only apply to the first ₹2 crore.

Eligible borrowers can receive credit guarantee coverage for loans up to 2 crores under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.

However, officials from the Agriculture Marketing Department have noted that banks are charging an interest rate of over 9% under the scheme, which is causing a bottleneck. Additionally, collateral is required for loans up to ₹2 crore.

SLBC has observed that the interest rate is determined by each bank's policy and has advised banks to adhere strictly to the guidelines prescribed under the scheme with regards to collateral security. 

-THE HINDU 

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