Direct Answer
The Institutional Interest Subvention is the direct subsidy transferred from the Government of India to Public Sector Banks, RRBs, and Cooperative Banks to bridge the gap between their cost of funds and the 7% concessional rate charged to the farmer
Govt of India→
1.5% SubventionBanks→
7% LoanFarmers Historically, this rate fluctuates based on the repo rate and cost of funds. It was previously 2.0% for the 2021-22 fiscal year, before being strictly standardized to 1.5% for the 2022-23 to 2025-26 continuations.
1.5% SubventionBanks→
7% LoanFarmers Historically, this rate fluctuates based on the repo rate and cost of funds. It was previously 2.0% for the 2021-22 fiscal year, before being strictly standardized to 1.5% for the 2022-23 to 2025-26 continuations.