RBI grants farmers improved loan on production pledges

(PNAFAN – IAN)

Mumbai, April 7 (IANS) In an effort to encourage agricultural credit, the RBI on Wednesday decided to raise the loan limit for individual farmers.

Individual farmers will now be eligible for an enhanced loan amount of Rs 75 lakh from banks against collateral or mortgage of agricultural products.

The borrowing limit under the program was previously capped at Rs 50 lakh.

As per the RBI Development and Regulatory Policy Statement, the increased borrowing limit for farmers against the agricultural commodity pledge will be available if those pledges are backed by Negotiable Warehouse Receipts (NWR) / electronic-NWR (e-NWR) issued by warehouses registered and regulated by the Warehousing Development and Regulatory Authority (WDRA).

The priority sector loan limit backed by other warehouse receipts will continue to be Rs 50 lakh per borrower. The circular in this regard will be published separately by the umbrella bank.

–IANS

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