RBI clears Rs 17,523 cr for wheat procurement

The Reserve Bank of India (RBI) on Wednesday issued authorisation of cash credit limit (CCL) of Rs 17,523 crore towards the first instalment for the procurement of nine million tonnes of wheat this rabi season by the Punjab government.

RBI has sent the communication about resumption of cash credit to the Punjab government, said a senior State Bank of India executive. Food credit authorisation is usually done at the beginning of the financial year, he added.

RBI would issue another authorisation for the second instalment shortly, said Harcharan Bains, advisor to the Punjab chief minister on national affairs.

Punjab CM Parkash Singh Badal thanked Prime Minister Narendra Modi for his prompt personal intervention in the matter. Badal, along with Punjab's food and civil supplies minister Adesh Partap Singh Kairon, had called on Modi in Delhi on Monday in connection with RBI's freeze on cash credit limit.

The CCL money is used to pay farmers for the crops government agencies procure from them.Punjab is the largest procurement state. It procures 10-11 million tonnes (mt) of wheat and 9-10 mt of rice from the central pool annually.

The issue, including provisioning, is still being discussed with regulator and the central government. Meanwhile, the data reconciliation process is progressing for clarity.

The Prime Minister's Office will be convening meeting soon, following assurance by PM Narendra Modi to Punjab Chief Minister Prakash Singh Badal on Tuesday.