RAJYA SABHA
The following steps taken, inter-alia, to provide easier loans to farmers and people living in rural areas have led to enhanced credit flow in rural areas. Credit flow to agriculture alone has increased by 32% from Rs. 86,981crore in 2003-04 to Rs. 1,15,242 crore in 2004-05:
i) The banks have been asked to simplify the procedure for sanction of loan.
ii) One page documentation has been circulated among banks for adoption
iii) Reserve Bank of India has instructed banks not to insist on collateral or margin for loans upto Rs. 50,000/-.
iv) Banks have been asked to issue Kisan Credit Cards to all eligible farmers.
v) Financing of Self Help Groups is being emphasised.
vi) A project has been initiated for lending by banks to joint liability groups of tenant farmers and oral lessees.
vii) Indian Banks’ Association has advised public sector banks to charge an interest rate of not more than 9% per annum on crop loans upto Rs. 50,000.
This information was given by Shri S.S. Palanimanicham, Minister of State for Finance in reply to a question raised by Shri Gireesh Kumar Sanghi in Rajya Sabha today.
BSC/BY/DN-423/05