Rajasthan releases ₹101.67 crore to cooperative banks to keep crop loans interest-free

The Rajasthan government has released ₹101.67 crore to all 29 district central cooperative banks to cover the interest on short-term crop loans given to farmers in 2025-26, Chief Minister Bhajan Lal Sharma’s office said.

Under the State’s scheme, farmers who repay short-term crop loans from cooperative banks on time pay no interest; the government reimburses the banks for the interest they forgo, a payment known as interest subvention. Delays in these payments squeeze the cooperative banks’ finances and can slow the next season’s lending.

Why it matters

Cooperative banks are the main source of cheap credit for small farmers in Rajasthan, who use crop loans to buy seed and fertiliser before the kharif and rabi seasons. With a weak monsoon in parts of the State this year, timely loans for the winter crop matter more than usual.