Mon Dec 09 18:49:09 UTC 2024: ## RBI Raises Unsecured Farm Loan Limit to ₹2 Lakh
**Mumbai, India** – The Reserve Bank of India (RBI) has announced a significant increase in the limit for unsecured agricultural loans, raising it from ₹1.6 lakh to ₹2 lakh. This move, aimed at mitigating the impact of rising inflation on farmers, was announced by RBI Governor Shaktikanta Das following the Monetary Policy Committee (MPC) meeting.
Das stated that the decision was made in response to rising inflation and increased input costs in agriculture. The increased limit will expand access to credit for small and marginal farmers. The RBI will soon issue a formal circular outlining the details of the new policy. Previously, the limit for unsecured agricultural loans was ₹1 lakh (2010) and was later increased to ₹1.6 lakh in 2019.
In addition to the loan increase, the RBI also granted Small Finance Banks (SFBs) permission to offer credit lines through the Unified Payments Interface (UPI). This facility, launched in September 2023 for scheduled commercial banks, is now extended to SFBs, enabling them to offer short-term credit products, particularly to “new-to-credit” customers. Further guidelines on this will be released shortly. These announcements were made as part of the RBI’s fifth bi-monthly monetary policy review for the current fiscal year.
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