Context:
The Reserve Bank of India (RBI) has amplified a limit beyond collateral-free agricultural loans so as to relieve tension in banks’ farm loan portfolios.
Key Highlights:
- RBI issued a notification to banks waiving collateral security and margin requirements for agriculture loans, including allied activity loans, up to ₹2 lakh per borrower, from ₹1.6 lakh earlier.
- This would release some collateral kept with banks in order to have the farmers and small borrowers borrow more money to repay them well.
