MUMBAI: In a bid to encourage farm credit, the Reserve Bank of India (RBI) on Wednesday decided to enhance the loan limit for individual farmers.

Accordingly, individual farmers will now be eligible for an enhanced loan amount of Rs 75 lakh from banks against the pledge or hypothecation of agricultural produce. The borrowing limit under the scheme was earlier capped at Rs 50 lakh.

As per RBI's statement on developmental and regulatory policies that enhanced borrowing limit for farmers against pledge of agricultural produce will be available if such pledges are backed by Negotiable Warehouse Receipts (NWRs)/electronic-NWRs (e- NWRs) issued by the warehouses registered and regulated by Warehousing Development and Regulatory Authority (WDRA).

The Priority Sector loan limit backed by other Warehouse Receipts will continue to be Rs 50 lakh per borrower. The circular in this regard will be issued separately by the apex bank.

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