RBI raises collateral free agricultural loan limit to Rs 2 lakh to aid farmers: Good news has come for farmers from the Reserve Bank of India on Saturday. RBI has increased the limit of agricultural loans without guarantee for farmers. RBI has increased the agricultural loan limit for agriculture related works from Rs 1.6 lakh to Rs 2 lakh. Now farmers will be able to get a loan of up to Rs 2 lakh without mortgaging their valuables with the bank. agriculture sector The Central Bank has taken this important decision to help and meet the rising costs in this sector.
This decision to increase the agricultural loan limit has been taken due to the impact of inflation rate and increasing cost of agriculture on farmers. Its objective is to provide better financial access to farmers and ensure that they have adequate resources to meet their operational and developmental needs without the problem of security.
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When will RBI’s new rule apply to banks?
The Ministry of Agriculture and Farmers Welfare of the Government of India has given instructions in this regard to banks across the country, which will come into effect from the beginning of the new year i.e. 1 January 2023. According to the press release of PIB, the government has asked banks to eliminate the requirement of mortgage and the condition of depositing any kind of margin for agricultural loans up to Rs 2 lakh given to farmers from January 1, 2025. It has also been asked to expedite the implementation of the new rules so that the farming community can get timely financial assistance. Apart from this, banks have been instructed to give maximum publicity about these new rules among the farmers of their area and the parties related to that field.
RBI gave these instructions to banks
- The Reserve Bank of India (RBI) has directed banks to remove the requirement of mortgage and any kind of margin deposit for agricultural loans given to farmers. These rules will be applicable for agricultural loans up to Rs 2 lakh.
- The new rules should be implemented quickly so that farmers can get the necessary financial assistance on time without any delay.
- Banks have been instructed to give wide publicity about these changes so that this information can reach the farmers and other parties in their field.
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Who will get the benefit?
This step promotes access to loans especially for small and marginal farmers, who cover more than 86% of the area.
This decision of RBI will reduce the borrowing expenses of small and marginal farmers and there will be no need to mortgage their valuable assets with banks to borrow money. In this way, it will be easier for farmers to invest in their agricultural operations, which will improve their productivity and livelihood.
Improving loan distribution will increase the utilization of Kisan Credit Card (KCC) loans, which will help farmers invest in agricultural operations and improve their livelihoods.
Government’s Modified Interest Subvention Scheme (Modified Interest Subvention Scheme) Combined with this, this policy offers loans up to Rs 3 lakh at an effective interest rate of 4%. This strengthens financial inclusion, supports the agriculture sector, and promotes credit-driven economic growth, in line with the government’s long-term vision for sustainable agriculture.
