RBI directs banks to make sufficient cash availbale to farmers for Rabi crop season

MUMBAI: The Reserve Bank of India on Tuesday directed all banks to ensure adequate cash is made available to rural bank branches and rural cooperative banks so that sufficient money is made available to farmers for Rabi crop season. The regulator said that approximately Rs 35,000 crore would be required by district cooperative central banks (DCCBs) for sanction and disbursement of crop loans to farmers.

“Banks with currency chests should ensure adequate cash supply to the DCCBs and RRBs,” RBI said in a notification. “Adequate cash supply should also be ensured for rural branches of all commercial (including RRBs).”

The regulator also asked banks to ensure that all bank branches located in APMCs should have adequate cash to facilitate smooth procurement. The RBI also said that NABARD would be utilizing its own cash credit limits up to about ? 23,000 crore to enable the DCCBs to disburse the required crop loans to farmers.

Farmers who are preparing for the Rabi season fear that the cash crunch due to withdrawal of legal tender of old Rs 500 and Rs 1000 notes will affect the sowing time.

Extending some relief on Monday the government has allowed farmers to buy seeds with old currency notes from any state or central government outlets and agriculture universities. Farmers have also been allowed to withdraw up to Rs 25,000 from banks.