News

Govt, RBI have taken major initiatives to mitigate hardship faced by farmers due to Covid

RBI’s extant directions on relief measures to be provided by respective lending institutions in areas affected by natural calamities

Union Minister of State for Finance Bhagwat Kisanrao Karad has said that the Government and the Reserve Bank of India (RBI) have taken major initiatives to mitigate the hardship being faced by farmers due to COVID-19. The Minister further stated the efforts made/being made by the Government for the remedy of the problems regarding agriculture loan being faced by the farmers in the country.

To meet the credit needs for post-harvest and kharif sowing requirements of farmers including small and marginal farmers, a front-loaded Special Liquidity Facility (SLF) of Rs. 55,000 crore under SLF-I and SLF-II has been extended by NABARD during COVID-19 pandemic for Regional Rural Banks, Cooperative Banks and Non Banking Financial Company (NBFCs)-Micro Finance Institutions (mFIs). This additional special liquidity facility to the rural financial institutions at concessional rate of interest will ensure enhanced credit flow to the agriculture and the allied sector.

Further, RBI’s extant directions on relief measures to be provided by respective lending institutions in areas affected by natural calamities, such as flood, cyclone, drought, hailstorm, cold wave/frost, etc., inter alia, include, restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc. These directions have been so designed that the moment calamity is declared by the concerned State Governments/District Authorities they are automatically set in motion without any intervention, thus saving precious time. The benchmark for initiating relief measures by banks has also been reduced to 33% crop loss in line with the National Disaster Management Framework.