RBI raises limit for collateral-free agri loans to Rs.1.6 lakh from Rs.1 lakh
-The Hindu Business Line
In the wake of the government announcing direct income support of ?6,000 per year for small and marginal farmers in the interim Budget on February 1, the Reserve Bank of India, on Thursday, raised the limit for collateral-free agriculture loans to Rs.1.6 lakh from Rs.1 lakh.
The central bank said the increased limit will enhance coverage of small and marginal farmers in the formal credit system. The circular to this effect will be issued shortly.
“Presently the banks are mandated to extend collateral-free agriculture loans up to Rs. 1 lakh. This limit of Rs. 1 lakh was fixed in 2010.
“Keeping in view the overall inflation and rise in agriculture input costs since then, it has been decided to raise the limit for collateral-free agriculture loans from ?1 lakh to ?1.6 lakh,” said the central bank in its Statement on Developmental and Regulatory Policies, which accompanied the 6th Bi-monthly Monetary Policy Statement.
To provide assured income support to small and marginal farmers, the government said it will launch the ‘Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) programme. Under this, vulnerable landholding farmer-families, having cultivable land up to two hectares, will be provided direct income support at the rate of Rs.6,000 per year.
This income support will be transferred directly into the bank accounts of beneficiary farmers in three equal instalments of Rs.2,000 each. The programme will be funded by the Government of India.
“Around 12 crore small and marginal farmer-families are expected to benefit from this. The programme will be made effective from December 1, 2018, and the first instalment for the period, up to March 31, 2019, will be paid during this year itself. This programme will entail an annual expenditure of Rs.75,000 crore,” Finance Minister Piyush Goyal said in his interim Budget speech.
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