Mumbai, Oct 15 (UNI) RBI today announced a Rs 25,000 crore temporary liquidity support to NABARD and scheduled banks to ensure adequate financing of agricultural operations.
RBI, in a circular today, said the support would be against the oustanding agricultural advances of banks. The measure is part of the slew of initiatives announced by the RBI today to ease the tight liquidity conditions of banks.
The limits will be related to the quantum of debt waived by banks under the Agricultural Debt Waiver and Debt Relief Scheme, 2008.
Liquidity support availed by banks will be provided under Section 17 (3-B) of the RBI Act 1934 to scheduled banks and Section 17 (4-E) of RBI Act 1934 to NABARD, at the rate of nine per cent per annum, and will have to be repaid within a period of three weeks from the issue date of circular but not later than November three.
This liquidity support is expected to provide Rs 17,500 crore to co-operative banks and RRBs and Rs 7,500 crore to commercial banks.
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