Mumbai: The Reserve Bank on Friday enhanced the collateral-free agriculture loans limit to Rs 2 lakh per borrower from the existing Rs 1.6 lakh due to inflation and the rise in farm input costs. Currently, banks are required to extend collateral-free agriculture loans up to Rs 1.6 lakh per borrower.
ALSO READ: Suraksha Diagnostic Shares Make Muted Market Debut, Decline Nearly 1 Pc
This limit was enhanced from Rs 1 lakh in 2010 to Rs 1.6 lakh in 2019. "Taking into account the rise in agricultural input costs and overall inflation, it has been decided to increase the limit for collateral-free agriculture loans from Rs 1.6 lakh to Rs 2 lakh per borrower," RBI Governor Shaktikanta Das announced while unveiling the December monetary policy.
RBI increases collateral-free agriculture loan limit to ₹2 lakh per borrower, up from ₹1.6 lakh, considering inflation and rising farm input costs.
He said this will enhance coverage of small and marginal farmers in the formal credit system. The central bank will issue a circular giving effect to the announcement soon.
FIRST Business Portal addressing the potential of business capability of North East Region.
