Credit Flow to Agriculture- Collateral free agricultural loans

RBI/2018-19/118
FIDD.CO.FSD.BC.No.13/05.05.010/2018-19

February 7, 2019

The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks (including RRBs and SFBs)

Madam/Sir,

Credit Flow to Agriculture- Collateral free agricultural loans

Please refer to paragraph 13 of the Statement on Development and Regulatory Policies of the Sixth Bi-Monthly Monetary Policy Statement for 2018-19 released on February 7, 2019.

2. In this connection, please refer to our circular RPCD.PLFS.BC.No 85/05.04.02/2009-10 dated June 18, 2010 on the captioned subject.

3. Keeping in view the overall inflation and rise in agriculture input cost over the years since 2010, it has been decided to raise the limit for collateral free agricultural loans from the existing level of ₹1 lakh to ₹1.6 lakh. Accordingly, banks may waive margin requirements for agricultural loans upto ₹1.6 lakh.

4. You are requested to give adequate publicity to this change and instruct your controlling offices/branches to implement the same immediately.

5. Please acknowledge receipt.