Fresh farm loan for Punjab flood-hit; old credit repayment deferred
Maximum damage was suffered by farmers in Amritsar, Gurdaspur, Tarn Taran
Flood-affected farmers from 1,695 villages in Punjab can avail of fresh crop loans without the repayment of their previous loan, while they will also get the benefit of moratorium on the term loans taken by them during the previous kharif marketing season.
Instructions to this effect have been issued by the Reserve Bank of India (RBI) to all banks in the region. These instructions will help fiscally distressed farmers avail of fresh crop loans on the same mortgaged land and avail of the same scale of finance, provided that the loan account was regular (no default in repayment) till August 28, 2025 — which has been earmarked as the date of incident/natural calamity.
There were 24.40 lakh crop loan accounts in Punjab as of September 30, 2025. The total crop loan availed by these loanees is Rs 64,572.56 crore. After Punjab witnessed one of the most devastating floods in its recent history, crops on 4.27 lakh acres of land in 22 of the 23 districts of the state, barring Fatehgarh Sahib, were damaged. The maximum damage was suffered by farmers in Amritsar, Gurdaspur, Tarn Taran, Hoshiarpur, Kapurthala, Fazilka and Ferozepur.
A task force had been formed by the State-Level Bankers Committee (SLBC) of Punjab to oversee these fresh loan disbursals, said RK Meena, DGM, SLBC, Punjab. The first meeting of the task force is scheduled for Wednesday. “We hope that around three lakh farmers benefit from this,” he said.
The flood-affected farmers who had availed of term loans have also got relief in the shape of moratorium in the loan repayment. In case they suffered a damage of 33 to 50 per cent in the floods, the moratorium period will be extended by two years. In case the farmers suffered a loss of over 50 per cent, the moratorium period will be extended by five years. The total term loans extended to 10.84 lakh farmers is Rs 23,136.64 crore.
It is learnt that even MSMEs (micro, small and medium enterprises), located in the flood-ravaged areas of Punjab, will get a moratorium on their term loans in case they too suffered damage of over 33 per cent because of the floods.
