Home Latest News RBI to extend repayment of farm loans upto 5-years

RBI to extend repayment of farm loans upto 5-years

Reserve Bank of India, RBI, has allowed banks to extend repayment period of farm loan upto 5-years in case 50 percent crop is damaged due to natural calamities like drought and flood. In a notification issued from Mumbai Friday, RBI said if crop damage is 33 percent, then loan repayment period can be extended up to 2 years, including one year of moratorium.

RBI has added that banks should not insist on additional collateral security for such restructured loans. The notification follows the government’s decision to reduce the criteria of crop loss from 50 per cent to 33 per cent for providing input subsidy or compensation to farmers.

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