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
- 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.
- 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.
- Review and revise any existing loan policies or circulars that still mandate 'No Due' certificates for such loans.
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
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).