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‘Special liquidity facility’ for farmers to meet post-harvest requirement in Covid time

New Delhi, July 2: The Centre on Monday informed the Parliament that the moratorium on agriculture term loan announced last year given the Covid pandemic has not been extended beyond August 2020 but an additional special liquid facility has been extended for post-harvest and Kharif sowing requirements.

Minister of State for Finance Bhagwat Kisanrao Karad, in a written reply in Lok Sabha, said that as per RBI’s advice the moratorium beyond August 31, 2020, was not extended taking into account the impact on the banking sector, credit culture and financial stability.

The moratorium was announced for a period of six months last year, up to August 31, to provide reprieve to the farming community because of the Covid pandemic. During the six months, the farmers were provided with the benefit of 2 per cent interest subvention and 3 per cent prompt repayment incentive was also extended to them.

However, the Minister said a front-loaded Special Liquidity Facility (SLF) of Rs 55000 crore has been extended by NABARD for post-harvest requirement during the Covid pandemic for regional rural banks, cooperative banks and non-banking financial companies as an additional facility.

“This additional special liquidity facility to the rural financial institutions at concessional rate of interest will ensure enhanced credit flow to the agriculture and the allied sector,” the Minister added.