Mumbai: In an attempt to bring relief to farmers, the Reserve Bank of India (RBI) on Tuesday asked all commercial banks to ensure sufficient cash supply to their rural branches, besides district central cooperative banks (DCCBs) and regional rural banks (RRBs).
In a late-evening notification, RBI said farmers should be adequately supported financially to ensure unhindered farming operations.
The notification also said DCCBs require Rs35,000 crore for sanction and disbursement of crop loans to farmers at the rate of Rs10,000 crore per week. It also added that these DCCBs can utilize the cash credit limit up to Rs23,000 crore with National Bank for Agriculture and Rural Development (Nabard) to disburse crop loans to Primary Agriculture Cooperatives (PACs) and farmers.
“As many of these loans will be disbursed in cash to facilitate farming related expenses, we advise in this regard that banks with currency chests should ensure adequate cash supply to DCCBs and RRBs. Adequate cash supply should also be ensured for rural branches of all commercial banks (including RRBs). Further, bank branches located in APMCs may also be given adequate cash to facilitate smooth procurement,” said RBI in its notification.
APMCs refer to agriculture produce market committees, which operate large wholesale markets.
The decision comes a day after finance minister Arun Jaitley met officials from RBI, Nabard and all banks to provide adequate funds to cooperative banks.
In a circular on 14 November, RBI barred exchange of notes against the scrapped Rs500 and Rs1,000 notes at co-operative banks