Home › Circulars › RBI/2006-2007/363

Simplified Agricultural Loan Procedures: No Due Certificate Waived

Current & verified — this is the latest version
Source: Reserve Bank of India · RBI/2006-2007/363 · issued 30 Apr 2007 · ~2 min read
Quick answerRBI directs banks to stop demanding 'No Due' certificates for agricultural loans up to Rs.50,000 to small/marginal farmers, share-croppers, etc. Instead, accept a self-declaration. Also, accept local administration/panchayat certificates for landless labourers, share-croppers, and oral lessees.
The rule, in the simplest words
How it plays out — a real example

When a small farmer, Mr. Kumar, comes to the bank for a loan of Rs.30,000 to buy seeds and fertilizers, the agri & priority-sector lending officer, Mr. Singh, can now accept Mr. Kumar's self-declaration instead of asking for a 'No Due' certificate from other banks. This saves Mr. Kumar time and money, and he can get the loan quickly to start his farming season.

What changed

Banks must immediately stop requiring 'No Due' certificates for small agricultural loans up to Rs.50,000 to small/marginal farmers, share-croppers, and similar borrowers; a self-declaration from the borrower is sufficient. For landless labourers, share-croppers, and oral lessees, banks may accept certificates from local administration or panchayati raj institutions regarding crop cultivation instead of traditional identity/status documents.

What it means for you

This reduces the time and cost burden on small farmers who previously had to obtain 'No Due' certificates from multiple banks, often delaying small loans. Banks can now rely on self-declaration for loans up to Rs.50,000, streamlining credit access. For landless and informal tenants, accepting local authority certificates removes a major documentation hurdle, potentially expanding the agricultural credit base.

What you must do

Who it affects

All Scheduled Commercial Banks (including Regional Rural Banks), Small and marginal farmers, Share-croppers, Landless labourers, Oral lessees, Local administration and panchayati raj institutions

❓ Common questions

What is the loan limit for which the 'No Due' certificate is waived?

The waiver applies to agricultural loans up to Rs.50,000 for small and marginal farmers, share-croppers, and similar borrowers.

What documents can landless labourers, share-croppers, and oral lessees provide instead of identity/status proof?

They can provide certificates from local administration or panchayati raj institutions regarding their cultivation of crops.

Does this circular apply to all banks?

Yes, it applies to all Scheduled Commercial Banks, including Regional Rural Banks (RRBs).

📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/363 RPCD.PLFS. BC. No.85 /05.04.02/ 2006-07 April 30,  2007 The Chairman /Managing Director/ Chief Executive Officer All Scheduled Commercial Banks (including RRBs) Dear Sir, Simplification of the Procedures and Processes for Obtaining Agricultural Loans  Please refer to paragraph 150 of the Annual Policy Statement for the year 2007-08 (copy enclosed). 2. At present, one of the hurdles faced by the farmers approaching for bank loans is the ‘No Dues’ Certificate (NDC) that they have to produce to the bank granting the loan, from various banks/co-operatives operating in the area. This entails a considerable amount of time and money for the farmers to be spent even to get a small loan. In order to obviate this situation, banks may immediately dispense with the requirement of "no due" certificate for small loans up to Rs.50,000 to small and marginal farmers, share-croppers and the like and, instead, obtain self-declaration from the borrower. 3. One of the problems faced by banks in lending to landless labourers, share-croppers and oral lessees is the absence of documents verifying their identity and status. In order to overcome this problem , banks may accept certificates provided by local administration / panchayati raj institutions regarding the cultivation of crops in case of loans to landless labourers, share-croppers and oral lessees. 4. Please acknowledge receipt. Yours faithfully, (G. Srinivasan) Chief General Manager Annex Paragraph 150 of the Annual Policy Statement for the year 2007-08: “The Working Group constituted in December 2006 to examine procedures and processes for agricultural loans (Chairman: Shri C. P. Swarnkar) for simplification of the procedures and processes for obtaining agricultural loans, especially by small and marginal farmers, has submitted its report. While the report has been taken up for detailed examination, it is proposed to: • dispense with the requirement of "no due" certificate for small loans up to Rs.50,000 to small and marginal farmers, share-croppers and the like and instead, obtain self-declaration from the borrower. • accept certificates provided by local administration/ panchayati raj institutions regarding the cultivation of crops in case of loans to landless labourers, share-croppers and oral lessees.”
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/363 · issued 30 Apr 2007. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forBranch Manager — PSU / Co-op / RRB (sanctioning powers)Agriculture Field OfficerLoan Operations / CPC / DisbursementBranch Operations (Accounts / FD / CASA)Compliance TeamProduct Manager (Digital & Lending)
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Financial Inclusion & Priority Sector
Small Account Rules for Co-operative Banks – RBI Circular 2011RRB CRR Hiked to 9% from Aug 30, 2008CRR Hiked for RRBs by 50 bps in Two StagesRRBs: PMLA Compliance – CTR, STR, and KYC Software MandateRRB CRR Hiked to 8.25% from May 24, 2008
Browse all departments →
Who does what — compliance checklist
🏦 Branch Manager
  • Train branch staff to accept and verify self-declarations for these small loans, and to accept local administration/panchayat certificates for landless labourers, share-croppers, and oral lessees.
  • Communicate the changes to all branches, especially rural and semi-urban ones, to ensure consistent implementation.
💻 IT / Systems
  • Update loan application forms and internal guidelines to replace 'No Due' certificate requirement with a self-declaration for agricultural loans up to Rs.50,000 to small/marginal farmers, share-croppers, etc.
📜 Compliance
  • Review and revise any existing loan policies or circulars that still mandate 'No Due' certificates for such loans.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All Scheduled Commercial Banks (including Regional Rural Banks), Small and marginal farmers, Share-croppers, Landless labourers, Oral lessees, Local administration and panchayati raj institutions), your first concrete step on “Simplified Agricultural Loan Procedures: No Due Certificate Waived” is: “Update loan application forms and internal guidelines to replace 'No Due' certificate requirement with a self-declaration for agricultural loans up to Rs.50,000 to small/marginal farmers, share-croppers, etc.” (RBI issued this 30 Apr 2007).

  1. Circular: RBI/2006-2007/363 -- Simplified Agricultural Loan Procedures: No Due Certificate Waived
  2. Issued: 30 Apr 2007
  3. Action required: Update loan application forms and internal guidelines to replace 'No Due' certificate requirement with a self-declaration for agricultural loans up to Rs.50,000 to small/marginal farmers, share-croppers, etc.
  4. Action required: Train branch staff to accept and verify self-declarations for these small loans, and to accept local administration/panchayat certificates for landless labourers, share-croppers, and oral lessees.
  5. Action required: Communicate the changes to all branches, especially rural and semi-urban ones, to ensure consistent implementation.
  6. Action required: Review and revise any existing loan policies or circulars that still mandate 'No Due' certificates for such loans.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3469&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—