Big news for farmer’s. The Governor of the Reserve Bank of India has provided significant relief to farmers in his recent monetary policy.
The Reserve Bank of India (RBI) has declared it will offer loans of up to Rs 2 lakh without collateral to help farmers cope with increasing inflation. At present, the cap is Rs 1.6 lakh. Previously, the RBI opted to keep the repo rate unchanged for the 11th time in a row. This indicates that the repo rate will stay the same at 6.5 percent. Conversely, the government has reduced the cash reserve ratio to 4 percent. This will provide a support of Rs 1.15 lakh crore to the banks in the country.
Great comfort to farmers
On Wednesday, RBI Governor Shaktikanta Das announced that, considering inflation and the rise in raw material costs for agriculture, the guarantee-free agricultural loan limit will be raised from Rs 1.6 lakh to Rs 2 lakh. He stated that this will broaden the opportunities for small and marginal farmers to secure loans from financial institutions.
In 2010, the RBI established a cap of Rs 1 lakh for the agriculture sector without any guarantee. Subsequently, it was raised to Rs 1.6 lakh in 2019. The RBI announced that a circular concerning this will be released shortly.
No alteration in the repo rate for the 11th occasion
On Friday, the Reserve Bank of India (RBI) maintained the policy rate at 6.5 percent for the 11th consecutive time during the fifth monetary policy meeting of this financial year. To enhance liquidity in the economy, the central bank lowered the CRR (cash reserve ratio) from 4.5 percent to 4 percent. The action will infuse Rs 1.16 lakh.
