The RBI MPC meeting as held from 4 Dec to 6 December 2024. In the meeting it has been decided to increase the limit of collateral free loan to farmers upto Rs.2 lakh. This means that now farmers can get free loan upto Rs.2 lakh. This loan can be used for agriculture and allied activities.
In light of rising inflation and increased agricultural input costs over the years, the limit for collateral-free agricultural loans, including loans for allied activities, has been raised from ₹1.6 lakh to ₹2 lakh per borrower. As a result, banks are instructed to waive collateral and margin requirements for agricultural loans, including loans for allied activities, up to ₹2 lakh per borrower.
Banks are urged to implement these revised guidelines promptly, with a deadline set for January 1, 2025. Additionally, banks are advised to widely publicize these changes to ensure awareness among borrowers.
How to get loan?
Please check below types of Agriculture Loans, Documents Required for Loan and How to Apply. You can also download Application Forms given below.
Types of Agricultural Loans
Farmers can choose from several types of loans depending on their needs:
- Crop Loans (Kisan Credit Card – KCC): For short-term credit to meet crop cultivation expenses.
- Term Loans: For purchasing machinery, equipment, or infrastructure development like irrigation systems.
- Livestock Loans: For animal husbandry, poultry, or dairy activities.
- Horticulture Loans: For orchard or plantation farming.
- Agricultural Gold Loans: Using gold as collateral for agricultural purposes.
- Agri-Infrastructure Loans: For building warehouses, cold storages, etc.
Documents Required
Farmers need to provide the following documents:
- Identity Proof: Aadhaar Card, PAN Card, or Voter ID.
- Address Proof: Utility bills, ration card, or Aadhaar card.
- Land Ownership Proof: Title deed or lease agreement if the applicant is a tenant farmer.
- Bank Account Details: Recent bank statement.
- Proof of Agricultural Activity: Receipts of previous farming activities or proof of livestock, crops, etc.
Application Process
- Visit the Bank: Farmers can approach their nearest branch of a public or private sector bank. Many cooperative banks and Regional Rural Banks (RRBs) also offer agricultural loans.
- Fill Out the Application Form: Provide details about the loan purpose, income, and agricultural activities.
- Submit Required Documents: Ensure all necessary documents are attached to the application.
- Verification Process: The bank will verify the details, including land ownership or tenancy rights.
- Loan Disbursement: Upon approval, the loan amount is credited to the farmer’s account.
