Temporary Liquidity Support for Agricultural Operations
Current · Source: Reserve Bank of India · RBI/2008-09/226 · issued 15 Oct 2008 · ~2 min read
Quick answerRBI provides Rs.25,000 crore temporary liquidity to banks and NABARD against outstanding agri advances, linked to debt waiver amounts under the 2008 scheme. Support at 9% p.a., repayable within three weeks but not later than Nov 3, 2008.
The rule, in the simplest words
RBI gives banks Rs.25,000 crore (a big loan) to help them keep lending to farmers, based on how much debt they wrote off (cancelled) under the 2008 farmer debt relief plan.
Banks must pay back this loan within 3 weeks, and no later than November 3, 2008.
The interest rate (extra money banks pay to borrow) is 9% per year.
Co-operative banks and RRBs (rural banks) get Rs.17,500 crore, and commercial banks (regular banks) get Rs.7,500 crore.
How it plays out — a real example
An agri & priority-sector lending officer in Indore checks her bank's records and sees they wrote off Rs.50 lakh in farmer loans under the 2008 debt waiver scheme. She quickly applies to RBI for temporary liquidity support, gets the funds at 9% interest, and uses them to approve new crop loans for local farmers, ensuring she repays everything by November 3, 2008.
What changed
RBI announced a temporary liquidity support of Rs.25,000 crore to scheduled banks and NABARD for financing agricultural operations. The support is linked to the quantum of debt waived under the Agricultural Debt Waiver and Debt Relief Scheme, 2008. It is provided at 9% per annum under specific sections of the RBI Act, 1934, and must be repaid within three weeks, by November 3, 2008.
What it means for you
This measure ensures banks have immediate funds to continue agricultural lending despite the debt waiver program. Co-operative banks and RRBs get Rs.17,500 crore, while commercial banks get Rs.7,500 crore, easing liquidity pressure. Banks must act quickly to access this short-term facility before the November 3 deadline.
What you must do
Assess your bank's outstanding agricultural advances and debt waiver amounts under the 2008 scheme to determine eligibility.
For scheduled commercial banks and UCBs, approach the Regional Director, Deposit Accounts Department, RBI, Mumbai to avail the support.
Non-scheduled UCBs may route requests through respective State Cooperative banks; RRBs and co-operatives through NABARD.
Ensure repayment of the liquidity support within three weeks but not later than November 3, 2008, as per the timeline.
RBI’s words: “extend the facility of temporary liquidity support for financing agricultural operations”
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/226
RPCD.PLFS . No. BC. 45 /05.04.02/2008-09
October 15, 2008
The Chairmen/Chief Executives of
all Scheduled Banks / NABARD
Dear Sirs,
Temporary liquidity support for financing agricultural operations
With a view to ensuring adequate financing of agricultural operations by banks, the Reserve Bank has decided to provide temporary liquidity support to NABARD and scheduled banks to the extent of Rs.25,000 crore against their outstanding agricultural advances. 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 RBI Act 1934 to scheduled banks and Section 17 (4-E) of RBI Act 1934 to NABARD, at the rate of 9 per cent per annum, and will have to be repaid within a period of three weeks from the date of this circular but not later than 3rd November 2008. 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.
2. Accordingly, scheduled commercial banks and scheduled UCBs desirous of availing of the support are required to approach the Regional Director, Deposit Accounts Department, Reserve Bank of India, Mumbai for the purpose. Non scheduled UCBs may approach RBI through the respective State Cooperative banks. RRBs and co-operatives may access the facility through NABARD.
Yours faithfully
( G.Srinivasan )
Chief General Manager – in – Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/226 · issued 15 Oct 2008. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks, Scheduled urban co-operative banks (UCBs), Non-scheduled UCBs, Regional Rural Banks (RRBs), Co-operative banks, NABARD), your first concrete step on “Temporary Liquidity Support for Agricultural Operations” is: “Assess your bank's outstanding agricultural advances and debt waiver amounts under the 2008 scheme to determine eligibility.” (RBI issued this 15 Oct 2008).
Circular: RBI/2008-09/226 -- Temporary Liquidity Support for Agricultural Operations
Issued: 15 Oct 2008
Action required: Assess your bank's outstanding agricultural advances and debt waiver amounts under the 2008 scheme to determine eligibility.
Action required: For scheduled commercial banks and UCBs, approach the Regional Director, Deposit Accounts Department, RBI, Mumbai to avail the support.
Action required: Non-scheduled UCBs may route requests through respective State Cooperative banks; RRBs and co-operatives through NABARD.
Action required: Ensure repayment of the liquidity support within three weeks but not later than November 3, 2008, as per the timeline.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
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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=4541&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.
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