Boost for farmers: RBI raises collateral-free agri loan limit to Rs 1.6 lkh

Currently, the banks are mandated to extend collateral-free agricultural loans up to Rs 1 lakh. This limit was fixed in the year 2010

The Reserve Bank of India (RBI) Thursday raised the limit of collateral-free agricultural loans to Rs 1.6 lakh from the current Rs 1 lakh with a view to help small and marginal farmers.

The central bank also decided to set up an internal working group (IWG) to review agricultural credit and arrive at a workable policy solution.

The Interim Budget had also announced measures to the farming sector in addition annual payment of Rs 6,000 to small and marginal farmers.

 

Currently, the banks are