Wednesday, January, 15,2025

RBI raises collateral-free agricultural loan limit to Rs 2 lakh to support farmers

New Delhi: The Reserve Bank of India (RBI) has announced an increase in the limit for collateral-free agricultural loans will be increased from Rs 1.6 lakh per borrower to Rs 2 lakh, effective from January 1, 2025.
According to the Ministry of Agriculture and Farmers Welfare, this decision is aimed at addressing the rising input costs and the growing financial challenges faced by farmers, particularly amid inflationary pressures on agricultural inputs.
The new policy allows farmers to access loans for agricultural activities, including allied sectors, without the need to provide collateral or meet margin requirements.
The RBI has directed banks across the country to expeditiously implement the revised guidelines, ensuring that financial assistance reaches farmers promptly.
Additionally, banks have been instructed to provide wide publicity to the changes to ensure that farmers and other stakeholders are well-informed about the updated loan provisions.
This move is expected to provide enhanced financial access to small and marginal farmers, who represent over 86% of the agricultural sector.
With collateral-free loans, farmers will no longer face the burden of offering assets as security to secure credit. This is anticipated to reduce borrowing costs and make it easier for farmers to invest in their agricultural operations, boosting productivity and livelihoods.
In addition to the collateral-free loan limit, the RBI's policy will likely increase the uptake of Kisan Credit Card (KCC) loans, enabling farmers to meet their operational and developmental needs.
The initiative also complements the Modified Interest Subvention Scheme, which offers loans up to Rs 3 lakh at an effective interest rate of 4 per cent.
This combined approach strengthens financial inclusion in the agricultural sector, supports sustainable farming practices, and aligns with the government's long-term vision for enhancing agricultural growth and economic resilience.

  Share on

Related News

visit e-papers

Daily Astro

image

Aries

Today brings opportunities for growth, but you'll need to stay focused. Trust your instincts to navigate challenges.

image

Pisces

Your intuition will guide you. Trust your feelings and explore creative outlets for peace of mind.

image

Aquarius

Innovation is your theme today. Explore unconventional ideas to solve lingering problems.

image

Capricorn

Hard work pays off today. Your dedication and discipline will lead to well-deserved recognition.

image

Sagittarius

Adventure is calling! Embrace new opportunities, but keep a balanced approach to risks.

image

Scorpio

Your determination will be unmatched. Dive deep into tasks, but don't forget to take breaks to recharge.

image

Libra

Harmony in relationships is your priority. Compromise and understanding will strengthen your bonds.

image

Virgo

Focus on organization and details. A well-planned day will lead to productive results and personal satisfaction.

image

Leo

Leadership will come naturally. Take charge of situations but remain humble for the best outcomes.

image

Cancer

Emotional balance is key today. Spend quality time with loved ones to find comfort and clarity.

image

Gemini

Today is perfect for networking and sharing ideas. Your adaptability will help you tackle unexpected changes with ease.

image

Taurus

Patience will be your strength today. Financial matters might need attention, so think twice before making big decisions.