Big Relief for Farmers: RBI to Provide Rs 2 Lakh Loan Without Interest

New Delhi (The Uttam Hindu): In a significant move, the Governor of the Reserve Bank of India (RBI) has announced a major relief for farmers in the latest monetary policy review. The RBI will now provide interest-free loans up to Rs 2 lakh to farmers, a substantial increase from the previous limit of Rs 1.6 lakh. This decision aims to ease the financial burden on farmers facing rising inflation and higher costs for agricultural inputs. The limit for such loans, which was set at Rs 1 lakh in 2010 and raised to Rs 1.6 lakh in 2019, will now be further extended to Rs 2 lakh. RBI Governor Shaktikanta Das emphasized that this change would expand access to loans for small and marginal farmers, making it easier for them to borrow from financial institutions. A circular detailing this change will be issued soon.

Additionally, the RBI decided to maintain the repo rate at 6.5 percent, marking the 11th consecutive time it has kept the rate unchanged. Meanwhile, the government has reduced the Cash Reserve Ratio (CRR) from 4.5 percent to 4 percent. This reduction will inject an estimated Rs 1.16 lakh crore into the banking system, providing banks with more liquidity to support economic activities.

As part of the policy review, the RBI also revised its economic growth forecast for the current financial year, lowering it from 7.2 percent to 6.6 percent due to prevailing economic conditions. However, it raised its retail inflation forecast from 4.5 percent to 4.8 percent.