In a much bigger respite to small and marginal farmers the Reserve Bank of India (RBI) today increased the limit for collateral-free loans for agricultural farmers from ₹1.66 lakh to ₹2 lakh per borrower.
“Keeping in view the overall inflation and rise in agriculture input cost over the years, it has been decided to raise the limit for collateral-free agricultural loans including loans for allied activities from the existing level of ₹1.6 lakh to ₹2 lakh per borrower. Accordingly, banks are advised to waive collateral security and margin requirements for agricultural loans including loans for allied activities up to ₹2 lakh per borrower” said RBI.
“The limit for collateral-free agriculture loans was last revised 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. This will further enhance credit availability for small and marginal farmers,” said RBI Governor Mr.Shaktikant Das.
The banks are advised to give effect to the revised instructions expeditiously and in any case not later than January 1, 2025. The banks are also advised to give adequate publicity to the above changes.
The apex bank will issue a separate circular to notify the enhancement scheme of the collateral-free loan shortly.
