The Reserve Bank of India enhanced the collateral-free agriculture loans limit to Rs 2 lakh per borrower from the existing Rs 1.6 lakh. At present, banks are required to extend collateral-free agriculture loans up to Rs 1.6 lakh per borrower. This limit was enhanced from Rs 1 lakh, set in the year 2010 to Rs 1.6 lakh in the year 2019. Keeping in view the overall inflation and rise in agricultural input costs since then, it has been decided to raise the limit for collateral-free agriculture loans from Rs 1.6 lakh to Rs2 lakh, RBI stated in its monetary policy statement on developmental and regulatory policies . This will enhance coverage of small and marginal farmers in the formal credit system.
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