Context:
RBI has updated and scoped the collateral-free loan ceiling for farmers with effect from January 1, 2025: Increased from ₹1.6 lakh to ₹2 lakh.
Highlights:
- Intended to provide relief assistance to small and marginal farmers on account of the increased input costs.
- This order mandates every bank operating throughout the country to instead prescribe no collateral and margin obligations on loans up to ₹2 lakh per borrower, based on agricultural and allied activity.
- Small and marginal land-holdingers would benefit through this decision, according to figures of the agriculture ministry, by 86%.
- The measure is intended to simplify access among the individuals to Kisan Credit Card (KCC) loans and to support the government in the realization of its Revised Interest Subvention Scheme.
KCC could refer to the Kisan Credit Card scheme or the Kisan Call Centre:
- Kisan Credit Card (KCC) scheme: This scheme is implemented by the Ministry of Agriculture and Farmers’ Welfare, Government of India. It provides farmers with credit for production, post-harvest expenses, marketing, consumption, and working capital. Farmers who can be eligible for the KCC.
