India doubles collateral-free farm loan limit

The Reserve Bank of India has asked banks to double the limit of collateral-free farm loans to INR100,000 (US$2,149.5), keeping in view the importance of credit flow to the agricultural sector.

"On the basis of representations received seeking enhancement of limits, it has been decided that banks may waive margin or security requirements for agricultural loans from the existing level of INR50,000 (US$1,074.75) to INR100,000 (US$2,149.5) with immediate effect," the RBI said in a release.

For agri-clinics, loans up to INR5 lakh can be availed without security.

The decision will help smaller borrowers in particular, who may not have the necessary assets as collateral.

The Reserve Bank of India (RBI) has asked banks to give adequate publicity to this change.