Insta
Farm Without Fear: RBI Increases Threshold Limit For Collateral-Free Loans For Farmers By 60 Per Cent To Rs 1.6 Lakh
Swarajya Staff
Feb 07, 2019, 04:27 PM | Updated 04:27 PM IST
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
The Reserve Bank of India (RBI) has raised the threshold limit for collateral-free agricultural loans to Rs 1.6 lakh from the current Rs 1 lakh.
The new policy decision, announced today (7 February), aims to help small and marginal farmers to avail larger loans without having to present an asset as collateral.
Presently the banks are mandated to extend collateral-free agricultural loans up to Rs 1 lakh. This limit of ₹ 1 lakh was fixed in the year 2010.
Keeping in view the overall inflation and rise in agricultural input costs since then, it has been decided to raise the limit for collateral–free agricultural loans from Rs 1 lakh to Rs 1.6 lakh. This will enhance coverage of small and marginal farmers in the formal credit system. The circular to this effect will be issued shortly,” said an RBI release.
Farm credit in India has grown consistently over the years, exceeding targets set in the respective budgets. Rs 11.68 lakh crore was given as credit to farmers in 2017-18, higher than the Rs 10 lakh crore target set for that year. Agri-loans worth Rs 10.66 lakh crore were disbursed in the 2016-17 fiscal, higher than the target of Rs 9 lakh crore. The target for 2018-19 fiscal stands at Rs 11 lakh crore.
Working Group to Review Agricultural Credit
Despite the growth in agri-credit, issues like regional disparity, the extent of coverage, etc remain. There is also the issue of deepening long-term agricultural credit for capital formation. Thus, RBI has constituted an Internal Working Group (IWG) to review agricultural credit in India.
Also Read: Modi’s Rejection Of Farm Loan Waivers Should Be The Start Of A New Realism
Save & read from anywhere!
Bookmark stories for easy access on any device or the Swarajya app.
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.