The Hindu Business Line : More fillip to farm sector

THE Reserve Bank of India (RBI) has increased the limit on advances granted to dealers in drip irrigation and sprinkler irrigation system and agricultural machinery from Rs 10 lakh to Rs 20 lakh.

This is one among the many initiatives RBI has undertaken to improve the credit delivery mechanism. It has also decided to increase the limit on advances granted to the farm sector, small business, weaker sections and repairs to houses in rural areas.

In order to increase credit flow to small business and weaker sections, RBI has decided to increase the existing overall limit of Rs 10 lakh to Rs 20 lakh without any ceiling for working capital. Besides, the banks have been given the freedom to fix the individual limits for working capital depending upon the requirements of different activities.

RBI has also increased the individual credit limit to artisans, village and cottage industries to Rs 50,000 from the existing limit of Rs 25,000. ``The limits will be under the overall limit of 25 per cent advances to weaker sections under priority sector or 10 per cent of net bank credit,'' RBI said in its mid-term review of monetary and credit policy for the year 2002-03.

With regard to housing sector in the rural and semi-urban areas, RBI has increased the existing limit for repairing damaged houses from Rs 50,000 to Rs 1 lakh.

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