RBI announces policy measures relating to financial inclusion

The Reserve Bank of India (RBI) has come up with a statement on developmental and regulatory policies. Following regulatory policy measures relating to financial inclusion were announced.

Revision in Lead Bank Scheme: The Reserve Bank has undertaken a detailed review of the existing guidelines on Lead Bank Scheme (LBS). It is now proposed to issue a comprehensive set of instructions on the Scheme with a view to streamline the operational aspects. In the revised Scheme, the objectives of LBS and the framework to achieve them are proposed to be delineated clearly. The revised guidelines are expected to enhance the effectiveness of the Scheme. The draft Circular will be issued shortly for public consultation. In addition, the Reserve Bank will be launching a unified portal for reporting of Bank-wise LBS data which is currently fragmented across various portals. This is expected to significantly enhance the data quality and provide better insights towards achieving the objectives of LBS.

Revision in the Guidelines of Kisan Credit Card (KCC): The Reserve Bank has comprehensively reviewed the KCC Scheme with a view to expand coverage, streamline operational aspects and address emerging requirements. It is now proposed to issue a revised set of instructions to banks on the Scheme, consolidating those on agriculture and allied activities. The proposed guidelines include, among others, standardisation of crop season, extension of KCC tenure to six years, alignment of drawing limit with Scale of Finance (SoF) for each crop season and inclusion of expenses on technological interventions.

Review of guidelines relating to use of Business Correspondents (BCs) by banks: Business Correspondents have been functioning as critical enablers of last mile access to financial services, particularly in respect of underserved, rural, and remote locations. Reserve Bank had set up a committee, consisting of officials from Reserve Bank, DFS, IBA and NABARD, to comprehensively examine their operations and make suitable recommendations for enhancing their efficiency. Basis the Committee's recommendations, the related regulatory guidelines are being reviewed, and the draft amendment directions will be placed for public consultations shortly.

Enhancement in Collateral free loan limit from Rs 10 lakh to Rs 20 lakh: With a view to facilitate improved access to formal credit, support entrepreneurial activity and strengthen last mile credit delivery for Micro and Small Enterprises (MSEs) with limited collateral, it has been decided to enhance the limit of collateral free loans to MSEs from Rs 10 lakh to Rs 20 lakh. The above provisions shall be applicable to all loans to MSE borrowers sanctioned or renewed on or after April 01, 2026.

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