Q. What is the prompt repayment incentive (PRI) rate per annum provided to farmers, for short term loans up to Rs. 3 lakh?
Answer:
3 per cent
Notes: The Reserve Bank of India recently directed all banks to extend the benefit of interest subvention and prompt repayment incentive to short term crop loans, to the accounts which have become due or will become due between March and May 2020.
The government offers an interest subvention of two percent per annum to banks and an additional 3 per cent interest subvention to farmers who pay their loans promptly. Hence the effective rate of interest is 4 per cent.