Mumbai: To enable banks to distribute more loans to farmers, the State government has approved a bank guarantee of Rs 2,000 crore, minister for co-operatives Chandrakant Patil announced here on Tuesday.

“The decision will enable the district cooperative banks to sanction additional loan to farmers apart from their existing loan,” the minister said and added that the decision has been taken keeping in view that the sowing season will start now.

Marathwada Rural Bank and 16 other district cooperative banks had demanded additional Rs 2,000 crore for distribution of additional loans to farmers, the minister said. District cooperative banks had demand for additional monetary help. Minister also warned the cooperative banks that they should not recover the loan amount from farmer’s crop insurance benefit, which has been deposited into the banks.

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