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Farmers security-free loan limit raised 60%

MUMBAI: After the mega income scheme for farmers, the RBI’s monetary policy has every other get advantages for agriculturalists. RBI governor Shaktikanta Das mentioned that farmers will collateral-free loans as much as Rs 1.6 lakh as against Rs 1 lakh until now.

The enhancement, which depend at the land holdings of the farmer, will enable 75% of the eligible farmers carry money without any security.

“The previous one lakh restrict used to be fastened within the yr 2010. So during the last 8 years there was inflation and taking that into consideration we have now finished some indexing to inflation and raised the restrict by way of Rs 60,000,” mentioned Das. He added that details of the loan restrict will likely be circulated quickly.

Collateral-free loans help small and marginal farmers who would not have any property that can be offered as security. Besides expanding the loan restrict, RBI has additionally decided to arrange an inner running group (IWG) to review agricultural credit within the nation.

However, some economists really feel that this would pose risks to asset quality of banks. “The transfer help farmers safe a larger quantum of unsecured loan. This might pose asset quality demanding situations in certain years during which monsoons are vulnerable,” mentioned Prithviraj Srinivas (Senior Vice President – Economist Axis Capital.

Addressing newspersons in his put up policy interplay, Das mentioned that the farm income scheme will upload to rural buying energy and as soon as the transmission takes position it will help farmers purchase extra of inputs corresponding to fertilisers and pesticide and boost rural demand in those sectors.

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