What changed
The liquidity support limits under Section 17(3-B) of the RBI Act for scheduled banks were increased to Rs. 7,500 crore, and for NABARD under Section 17(4-E) to Rs. 2,500 crore. The facility's validity was extended to December 15, 2008, from earlier deadlines.
What it means for you
Banks and NABARD get higher temporary funding to meet agricultural credit needs during the peak season, reducing liquidity pressure. This supports timely disbursement of crop loans and other farm finance, helping maintain rural cash flow.
What you must do
- Update internal limits to reflect the new Rs. 7,500 crore cap for liquidity support under Section 17(3-B).
- Ensure agricultural loan disbursements align with the extended facility period up to December 15, 2008.
- Monitor utilization of the enhanced limit to avoid breaching the revised ceiling.
- Coordinate with NABARD for any joint financing arrangements under the revised Rs. 2,500 crore limit.
Who it affects
All scheduled banks, NABARD, Agricultural loan borrowers
What is the new liquidity support limit for scheduled banks?
The limit has been revised to Rs. 7,500 crore, effective from December 6, 2008, under Section 17(3-B) of the RBI Act.
Until when is this facility available?
The temporary liquidity support is extended up to December 15, 2008.
Does this circular change any other conditions from previous circulars?
No, all other conditions from the earlier circulars dated October 15, 2008 and November 3, 2008 remain unchanged.