New Delhi, December 6:
Reserve Bank of India (RBI) Governor Shaktikanta Das announced on Friday that the limit for collateral-free agricultural loans will be raised from Rs 1.6 lakh to Rs 2 lakh per borrower. Currently, banks are required to offer collateral-free agricultural loans up to Rs 1.6 lakh per borrower.
This limit was previously increased from Rs 1 lakh in 2010 to Rs 1.6 lakh in 2019. “The limit for collateral-free agriculture loans was last revised in 2019. Considering the rise in agricultural input costs and overall inflation, it has been decided to increase the limit from Rs 1.6 lakh to Rs 2 lakh per borrower. This move will further boost credit accessibility for small and marginal farmers,” Das stated.
He emphasized that this step will improve the inclusion of small and marginal farmers in the formal credit system.
A circular will be issued by the central bank shortly to implement this decision.
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