Banks Asked To Make Funds Available To Farmers Through Cooperative Institutions

New Delhi: The government on Monday asked banks to provide resources to cooperative institutions with which they are associated to meet cash requirements of the farm sector during the ongoing rabi season.

"We had a discussion with RBI, Nabard and all public sector banks and the only item for discussion was with regard to transfer of resources to rural areas so that they will reach the farmers since the sowing season for rabi is on and a lot of this will happen through the cooperative itself," Finance Minister Arun Jaitley said.

"Nabard (National Bank for Agriculture and Rural Development) has given details of immediate requirements on a weekly basis and it's been decided that banks with whom the cooperatives are associated will make the resource available straightway."

According to sources, there is a requirement of about Rs 5,000 crore for the farm sector on a weekly basis for next few weeks as this is the peak rabi sowing season. 

Asked about Prime Minister Narendra Modi's statement on Sunday that banks will cut lending rates, Mr Jaitley said: "I don't wish to add to that at all."

Besides, the government has directed banks to waive all transaction charges made through Rupay debit cards. 

All the banks, including private ones, will not levy any transaction charges, the sources said.

Earlier in the day, the finance ministry permitted farmers to use old Rs 500 notes for purchasing seeds from any state or central government outlets and agri universities.

Farmers can purchase seeds from centres, units or outlets belonging to central or state governments, public sector undertakings, national or state seeds corporations, central or state agricultural universities and the Indian Council of Agricultural Research (ICAR), on production of proof of identity.

This is in addition to the decision taken earlier for making cash available with the farmers by permitting them to draw up to Rs 25,000 per week from their KYC compliant accounts subject to the normal loan limits and conditions, apart from the other facilities announced last week.

The government has also extended the deadline for payment of crop insurance premium by 15 days and permitted APMC-registered traders to withdraw up to Rs 50,000 per week.