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Friday, August 29, 2008

Crop Loan - 80% Short Term Prodution & 20% Clean Credit Limit

A new simplified cyclical credit product for financing crop production while also ensuring year round liquidity for farmers, particularly in rain-fed areas of the country.

Simplified cyclical credit product for farmers

Please refer to paragraphs 138 and 139 of the Annual Policy Statement for the year 2008-09

Accordingly, each commercial bank as also RRB may select one rain fed district for introduction, on a pilot basis, of a new product for financing crop production whereby

(a) 80 per cent of the crop loan requirement of individual borrowers may be released through a short term production loan in conformity with the present norms / practices, and

(b) the remaining 20 per cent representing the ‘core component’ (expenses for land preparation, pre-sowing operations etc. besides self labour/ consumption) may be sanctioned as a ‘clean credit limit’ to ensure year round liquidity.

Please find the Notification here.


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