Executive Summary:
This is a notification from the Reserve Bank of India (RBI) regarding Priority Sector Lending (PSL). It announces an increase in the loan limits for bank lending against Negotiable Warehouse Receipts (NWRs) and electronic Negotiable Warehouse Receipts (eNWRs). This decision, effective April 7, 2021, aims to ensure greater credit flow to farmers and encourage the use of regulated warehouses.
Key Points / Main Content:
* **Eligibility for PSL Classification:**
* Bank loans against pledge/hypothecation of agricultural produce, including warehouse receipts for a period not exceeding 12 months, are eligible for classification under PSL.
* **Revised PSL Limits:**
* The PSL limit for loans against NWRs/eNWRs is enhanced from ₹50 lakh to ₹75 lakh per borrower.
* The PSL limit backed by warehouse receipts other than NWRs/eNWRs will continue to be ₹50 lakh per borrower.
* **Amendment to Master Direction:**
* Paras 8.1 (vii) and 8.2 (b) of the Master Direction on Priority Sector Lending Targets and Classification dated September 4, 2020, are modified to reflect the revised limits.
* Para 8.1: Farm Credit - Individual farmers: Loans against pledge/hypothecation of agricultural produce including warehouse receipts for a period not exceeding 12 months subject to a limit up to ₹75 lakh against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.
* Para 8.2: Farm Credit - Corporate farmers, Farmer Producer Organisations (FPOs)/FPC/ Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities: Loans up to ₹75 lakh against pledge/hypothecation of agricultural produce including warehouse receipts for a period not exceeding 12 months against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.
Impact Analysis:
Commercial Banks (including Regional Rural Banks, Small Finance Banks, Local Area Banks and Primary Urban Cooperative Banks other than Salary Earners Banks)
* Impact: Banks can now lend a higher amount (up to ₹75 lakh) against NWRs/eNWRs under the PSL scheme, potentially increasing their PSL portfolio and contributing to agricultural credit flow.
* Action Required: Banks need to update their lending policies and procedures to reflect the increased PSL limits for loans against NWRs/eNWRs and ensure compliance with the amended Master Direction.
Farmers:
* Impact: Farmers can now access higher loan amounts against NWRs/eNWRs, providing them with greater financial flexibility and potentially encouraging the use of regulated warehouses.
* Action Required: Farmers should be aware of the increased loan limits and consider using NWRs/eNWRs to avail higher credit from banks.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and monetary policy.
Priority Sector Lending: A scheme by Reserve Bank of India that mandates banks to allocate a certain portion of their lending to specific sectors of the economy.
Negotiable Warehouse Receipts: Documents issued by warehouses against deposited goods, which are negotiable instruments.
Regional Rural Banks: Commercial Banks operating at a regional level in India
Small Finance Banks: A type of bank in India focused on providing basic banking services to underserved populations.
Primary Urban Cooperative Banks: Cooperative banks operating in urban areas in India.
Mumbai, Maharashtra: The financial capital of India, where the Central Office of the Reserve Bank of India is located.
Farmer Producer Organisations: Organizations formed by farmers to collectively improve their income and market access.
भारतीय �रज़व र् ब�क
------------------------------------- RESERVE BANK OF INDIA -----------------------------------
www.rbi.org.in
RBI/2021-22/14
FIDD.CO.Plan.BC.No.7/04.09.01/2021-22 April 7, 2021
The Chairman / Managing Director/
Chief Executive Officer
[All Commercial Banks including Regional Rural Banks,
Small Finance Banks, Local Area Banks and
Primary (Urban) Co-operative Banks other than Salary Earners’ Banks]
Dear Sir/Madam
Priority Sector Lending (PSL) – Increase in limits for bank lending against
Negotiable Warehouse Receipts (NWRs) / electronic Negotiable Warehouse
Receipts (eNWRs)
Please refer to the Statement on Developmental and Regulatory Policies dated April 7,
2021, wherein Reserve Bank of India (RBI) had announced increase in loan limits for
bank lending against NWRs/eNWRs.
2. In terms of paras 8.1 (vii) and 8.2 (b) of the “Master Direction on Priority Sector
Lending – Targets and Classification” dated September 4, 2020, bank loans against
pledge/ hypothecation of agricultural produce (including warehouse receipts) for a
period not exceeding 12 months are eligible for classification under PSL, subject to a
limit up to ₹50 lakh per borrower.
3. With a view to ensure greater flow of credit to the farmers against
pledge/hypothecation of agricultural produce, and to encourage use of NWR/eNWR
issued by regulated warehouses as a preferred instrument for availing such finance by
the farmers, it has been decided to enhance the PSL limit for loans against
NWRs/eNWRs from ₹50 lakh to ₹75 lakh per borrower. The PSL limit backed by the
warehouse receipts other than NWR/eNWR will continue to be ₹50 lakh per borrower.
4. Consequent to the above change, para 8.1(vii) and 8.2(b) of the Master Direction on
Priority Sector Lending – Targets and Classification dated September 4, 2020 will stand
modified as follows:
िव�ीय समावेशन और िवकास िवभाग,क��ीय कायार्लय, 10व� मंिज़ल,क��ीय कायालर् य िब�ल्डगं ,शहीद भगत �सहं माग,र् मुंबई 400001
टेलीफोन:Tel No.: +912222601000/ फैक्स: +91-22-22621011/22610948/22610943 ईमेल: cgmincfidd@rbi.org.in
Financial Inclusion and Development Department, Central Office,10th Floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai 400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए
चते ावनी : �रज़व र्बक� �ारा -डाक, मले एसएमएस या फोन कॉल के ज�रए �कसी क� भी व्य ि�गत जानकारी जसै ेबक� के खात ेका ब्य ौरा, पासवड र्आ�द नह� मागं ी जाती ह।ै यह धन रखन ेया दने े का �स् ताव भी नह�
करता ह।ै ऐसे �स् ताव� का �कसी भी तरीके से जवाब मत दीिजए।
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details,
passwords, etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers.Priority Sector Lending (PSL) – Increase in limits for bank lending against
Negotiable Warehouse Receipts (NWRs) / electronic Negotiable Warehouse Receipts (eNWRs)
Para 8.1 - Farm Credit - Individual farmers
vii. Loans against pledge/hypothecation of agricultural produce (including warehouse
receipts) for a period not exceeding 12 months subject to a limit up to ₹75 lakh against
NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than
NWRs/eNWRs.
Para 8.2 Farm Credit - Corporate farmers, Farmer Producer Organisations
(FPOs)/(FPC) Companies of Individual Farmers, Partnership firms and Co-
operatives of farmers engaged in Agriculture and Allied Activities
(b) Loans up to ₹75 lakh against pledge/hypothecation of agricultural produce (including
warehouse receipts) for a period not exceeding 12 months against NWRs/eNWRs and
up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.
Yours faithfully
(Sonali Sen Gupta)
Chief General Manager-in-Charge
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