Lok Sabha Question No. 4100 (UNSTARRED), answered on 2025-03-25
Subject: Adjusted Net Bank Credit
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Sachithanantham R

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA

## UNSTARRED QUESTION No. 4100 TO BE ANSWERED ON 25 TH  MARCH, 2025

## ADJUSTED NET BANK CREDIT

4100. Shri Sachithanantham R.:

Will the Minister of AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण मंũी be pleased to state:

(a)  the percentage of the mandated 18% Adjusted Net Bank Credit that was allocated to micro, small and medium scale farmers for the FY 2024-25; and

(b)  the  details  of  the  measures  taken  by  the  Government to ensure  the  banks comply with the mandate and extend credit to the small farmers?

## ANSWER

## MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण राǛ मंũी (SHRI RAMNATH THAKUR)

(a):  Reserve  Bank  of  India  has  issued  guidelines  on  Priority  Sector  Lending  (PSL)  vide Master Directions on PSL dated September 04, 2020. As per priority Sector Landing (PSL) regulation, RBI has mandated that the Scheduled Commercial Banks will provide 18% of Adjusted  Net  Bank  Credit  (ANBC)  or  Credit  Equivalent  of  Off-Balance  Sheet  Exposure (CEOBE),  whichever  is  higher;  out  of  which  a  sub  limit  has  been  fixed  for  small  and marginal farmers which at present is 10%.

(b): In order to ensure that Banks comply with the directions and extend credit to the small farmers,  Banks  have  been  prescribed  a  sub-target  for  'Weaker  Sections'  including  Small and marginal farmers. Further, banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established  with  National  Bank  for  Agriculture  and  Rural  Development  (NABARD)  and other  funds  with  NABARD  as  decided  by  the  Reserve  Bank  from  time  to  time.  The amounts from RIDF  are  refinanced  to  District  Co-operative  Central  Bank  (DCCBs)  and Regional  Rural  Banks  (RRBs)  though  Short  Term  Refinance  for  Seasonal  Agricultural Operations  (STSAO)  scheme  of  NABARD,  for  onward  lending  to  small  and  marginal farmers.

Government is also supporting small and marginal farmer through Modified Interest subvention  scheme  aims  to  provide  concessional  interest  rates  on  short-term  agricultural loans  obtained  by  farmers  through  Kisan  Credit  Cards  (KCC)  for  their  working  capital requirements. Under this scheme, farmers receive KCC loans at a subsidized interest rate of 7%. To facilitate this, an up front interest subvention (IS) of 1.5% is provided to the lending financial  institutions.  Additionally,  farmers  who  repay  their  loans  promptly  receive  a  3% Prompt Repayment Incentive (PRI), effectively reducing the interest rate to 4% per annum. The benefits  of  IS  and  PRI  are available  for  loan  limits  up  to  Rs.3  lakhs.  However,  if  the short-term loan is taken for allied activities (other than crop husbandry), the loan amount is limited to Rs.2 lakhs only keeping in the working capital requirements of small and marginal farmers.  However,  in  the  budget  of  2025,  an  announcement  has  been  made  to  extend  this limit to Rs. 5 lakh.

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