RBI increases limit on collateral-free agriculture loans to Rs 1.6 lakh

To boost liquidity in the farming sector, particularly among small and marginal farmers, the RBI on Thursday announced increasing the limit on collateral-free agriculture loans to Rs 1.6 lakh from Rs 1 lakh.

In 2010, the collateral-free limit for crop loans and term loans was hiked from Rs 50,000 to Rs 1 lakh.

The RBI said that move has been taken “keeping in view the overall inflation and rise in agriculture input costs” since 2010. “This will enhance coverage of small and marginal farmers in the formal credit system,” the RBI said. It also decided to set up an internal working group