New Delhi: To bolster the agricultural sector, the Reserve Bank of India (RBI) has raised the agricultural loan limit per borrower from Rs1.6 lakh to Rs2 lakh. This move aims to counter rising agricultural expenses and inflation, ensuring farmers have better access to financial resources.
The new guidelines will come into effect on January 1, 2025, with the RBI directing banks to: Eliminate additional security and margin requirements for loans, including allied activities, up to 2 lakh per borrower.
Ensure prompt implementation of the updated rules to provide timely financial support to farmers. Launch awareness campaigns to inform farmers and stakeholders about the revised policies.
This policy is particularly beneficial for small and marginal farmers, who form over 86% of the farming community. By reducing borrowing costs and simplifying the loan process, it encourages greater investment in farming activities, ultimately improving farmers’ livelihoods.
Additionally, the initiative promotes the use of Kisan Credit Cards (KCC) by offering loans up to Rs3 lakh at a subsidized interest rate of 4% under the revised interest subvention scheme. This step aligns with the government’s commitment to sustainable agriculture, financial inclusion, and strengthening the rural economy.
