**Policy Summary:**
This circular, FIDD.CO.FSD.BC.No.1305/05.010/2018-19, issued by the Reserve Bank of India (RBI) on February 7, 2019, addresses the flow of credit to the agricultural sector, specifically concerning collateral-free agricultural loans. The circular modifies existing guidelines outlined in circular RPCD.PLFS.BC.No 85/05.04.02/2009-10 dated June 18, 2010.
The key change announced is an increase in the limit for collateral-free agricultural loans from ₹1 lakh to ₹1.6 lakh. This adjustment takes into account overall inflation and the rise in agricultural input costs since 2010, as referenced in paragraph 13 of the Sixth Bi-Monthly Monetary Policy Statement for 2018-19. Banks are permitted to waive margin requirements for agricultural loans up to this revised limit.
The RBI directs all Scheduled Commercial Banks, including Regional Rural Banks (RRBs) and Small Finance Banks (SFBs), to implement this change immediately and provide adequate publicity to ensure awareness.
For further information, contact Sonali Sen Gupta, Chief General Manager, Financial Inclusion Development Department, Central Office, 10th Floor, Central Office Building, Shahid Bhagat Singh Marg, P.B.No.10014, Mumbai – 400001. Contact can be made via telephone at 022-22601000 / 91-22-22621011 / 22610943 / 22610948 or via email at cgmincfidd@rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian banking system.
All Scheduled Commercial Banks: Refers to all commercial banks in India that are listed in the Second Schedule of the Reserve Bank of India Act, 1934, including Regional Rural Banks (RRBs) and Small Finance Banks (SFBs).
Agriculture: Refers to the sector of the economy related to farming and cultivation of land.
Sixth Bi-Monthly Monetary Policy Statement: Refers to one of the monetary policy statements issued by the Reserve Bank of India.
Financial Inclusion Development Department: A department within the Reserve Bank of India.
Mumbai, Maharashtra: The city in India where the Central Office of the Reserve Bank of India is located.
Collateral free agricultural loans: Loans provided to farmers without any requirement for security.
Sonali Sen Gupta: Chief General Manager at Reserve Bank of India.
भारतीय �रज़व र्बक�
RESERVE BANK OF INDIA
www.rbi.org.in
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.
Yours faithfully,
(Sonali Sen Gupta)
Chief General Manager
िवत् तीय समावेशन और िवकास िवभाग, केन्�ीय कायार्लय,10 वी मंिजल, क��ीय कायार्लय भवन, शहीद भगत�संह माग,र्पोस्ट बॉक्स स.ं 10014,मुंबई -400001
Financial Inclusion & Development Dept., Central Office,10th Floor, Central Office Building, Shahid Bhagat Singh Marg,P.B.No.10014,Mumbai-1
टेली Tel:022-22601000 फैक्सः 91-22-22621011/22610943/22610948 ई -मेल : cgmincfidd@rbi.org.in