RBI Raises Collateral-Free Agriculture Loan Limit for Farmers from to Rs 1.6 Lakh to Rs 2 Lakh
Reserve Bank of India (RBI) Governor Shakikanta Das has given a big hit to farmers in his latest monetary policy review. In order to reassure the farmers against the increase in prices, the RBI on friday enhanced the collateral-free agriculture loans limit to Rs 2 lakh per borrower in view of inflation and rise in farm input costs. Till now this limit was Rs 1.6 lakh.
RBI has announced that they will give loans up to two lakh rupees without any guarantee. Earlier, the RBI had decided not to change the repo rate for the 11th time in a row. That means the repo rate will remain unchanged at 6.5 percent. On the other hand, the cash reserve ratio has been reduced to 4 percent. Banks of the country will get a boost of Rs 1.15 lakh crore after RBI’s decision. RBI Governor Shaktikanta Das informed about the decisions taken in the monetary policy review. In view of the rise in prices and the increase in the cost of raw materials used in agriculture, it has been decided to increase the collateral-free agri loan to Rs 2 lakhthe existing Rs 1.6 lakh
After this decision of RBI, the number of farmers taking loans from financial institutions will increase. In 2010, RBI decided to give loans of up to one lakh rupees to the agricultural sector without any guarantee. In 2019, its limit was increased to Rs 1.6 lakh.In this regard, the RBI Governor said that a circular will be issued soon.
The Reserve Bank of India on Friday kept the policy rate unchanged for the 11th consecutive time in the fifth monetary policy review meeting of this fiscal year. However, in order to increase the amount of cash in the economy, the Central Bank has reduced the CRR (Cash Reserve Ratio) from 4.5% to 4%. After this move, additional liquidity of Rs 1.16 lakh crore will be available to release cash into the market. According to the CRS, commercial banks have to keep a fixed portion of their deposits in the form of cash with the central bank.
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