The Reserve Bank of India (RBI) has increased the limit for collateral-free agricultural loans from ₹1.6 lakh to ₹2 lakh per borrower.
This move aims to help farmers cope with rising input costs and inflation, offering them better financial access without needing to provide collateral.
Effective January 1, 2025, banks must waive collateral and margin requirements for such loans and implement these changes promptly.
This policy is expected to benefit small and marginal farmers by reducing borrowing costs and promoting the uptake of Kisan Credit Card (KCC) loans, thus supporting agricultural investment and economic growth.