The Ministry of Finance vide its notification dated 2nd August 2021 has notified the Major initiatives taken by the Government & RBI to mitigate the hardship faced by farmers due to COVID-19.
In respect of loans to allied activities viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture, RBI has issued a clarification that these loans can be taken up for resolution under the Resolution Framework for Covid-19 related Stress issued on 6th August 2020 which, inter alia, provides for a moratorium upto two years.
Further RBI’s extant directions on relief measures to be provided by respective lending institutions in areas affected by natural calamities, such as flood, cyclone, drought, hailstorm, cold wave/frost, etc., inter alia, include, restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium, etc.
These directions have been so designed that the moment calamity is declared by the concerned State Governments/District Authorities they are automatically set in motion without any intervention, thus saving precious time. The benchmark for initiating relief measures by banks has also been reduced to 33% crop loss in line with the National Disaster Management Framework.
Further to meet the credit needs for post-harvest and Kharif sowing requirements of farmers including small and marginal farmers, a front-loaded Special Liquidity Facility (SLF) of Rs. 55,000 crore under SLF–I and SLF-II has been extended by NABARD during COVID-19 pandemic for Regional Rural Banks, Cooperative Banks and Non Banking Financial Company (NBFCs)-Micro Finance Institutions (mFIs). This additional special liquidity facility to the rural financial institutions at concessional rate of interest will ensure enhanced credit flow to the agriculture and the allied sector.
