RBI Enhances Collateral-Free Loan for Farmers | 20 Dec 2024

Source: BS

The Reserve Bank of India (RBI) has increased the collateral-free loan limit for farmers from Rs 1.6 lakh to Rs 2 lakh to support small and marginal farmers amidst rising input costs.

Key Highlights:

• Beneficiaries: Over 86% of farmers, primarily small and marginal landholders, are expected to benefit.
• Extended Coverage: Includes loans for allied agricultural activities, enabling income diversification.
  • Banks have been directed to ensure prompt implementation and raise awareness about the provision.
• Complementary Schemes: The measure will ease access to Kisan Credit Card (KCC) loans and align with the Modified Interest Subvention Scheme, offering loans up to Rs 3 lakh at an effective interest rate of 4%.
  • This initiative enhances financial inclusion in agriculture, enabling farmers to manage input costs effectively, invest in operations, and improve livelihoods.

Read More: Kisan Credit Card