RBI issues notification that banks can accept voluntary pledges of gold and silver as collateral for agriculture and MSME loans

The Reserve Bank of India (RBI) has issued a notification that banks can accept voluntary pledges of gold and silver as collateral for agriculture and MSME loans, even if the loans fall within the collateral-free limit. This directive will likely offer more flexibility without violating existing lending guidelines. This comes months after the RBI raised the collateral-free loan limit for farmers from Rs 1.6 lakh to Rs 2 lakh per borrower in December 2024.

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