MUMBAI: The Reserve Bank of India (RBI) has increased the limit for collateral-free agriculture loans to ₹2 lakh per borrower, up from the previous ₹1.6 lakh. This adjustment reflects the rising costs of farming inputs and inflation over the years.
Previously revised in 2019, the loan limit was increased from ₹1 lakh, which had been in place since 2010. The RBI’s decision aims to extend the formal credit system’s reach to small and marginal farmers, enhancing their financial inclusivity and easing access to capital. This policy update comes alongside broader measures by the government to strengthen the agricultural sector, including annual income support under the PM-KISAN scheme.
The RBI continues to emphasize agricultural credit growth, addressing challenges like regional disparity and limited long-term credit options for capital formation in the sector. A circular detailing this update will be issued shortly to ensure smooth implementation.
This move is expected to empower millions of farmers, providing financial support crucial for agricultural productivity and growth.
Source: Web Team, C6N
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