RBI raises limit for collateral – free agri – loans

RBI Raises limit for collateral

Question: Consider the following statements:
1) RB raised the limit for collateral – free agriculture loans to 1.6 lakh from 1 Lakh
2) Ujjivan Small Finance Bank is the first bank to provide collateral free loans
3) The limit of 1 Lakh has been fixed in the year 2010
Of the above correct statement/s is/are:
(a) Only 1
(b) Only 2
(c) Only 3
(d) All 1,2,3
Answer: (d)
Related facts:

  • On 7th February, 2019, Reserve Bank of India raised the limit for collateral – free agricultural loans to Rs1.6 lakh form Rs1 lakh.
  • The decision has been taken in view of the overall inflation and rise in the agricultural input costs since 2010 when the limit was last revised. This move will enhance coverage of small and marginal farmers in the formal credit system.
  • RBI has constituted an Internal Working Group (IWG) to review agricultural credit. IWG will also examine the issues and arrive at workable solutions and policy initiatives.
  • Ujjivan Small Finance Bank has announced the launch of ‘Kisan Suvidha Loan’ for small and marginal farmers and allied activities.
  • It is a first bank of this series to provide collateral – free loans for agricultural and allied activities. Ujjivan has launched the product in Tamil Nadu, West Bengal, Karnataka and Odisha.

Links:
http://newsonair.com/Main-News-Details.aspx?id=359375
https://www.thehindubusinessline.com/economy/agri-business/rbi-raises-limit-for-collateral-free-agri-loans-to-16-lakh-from-1-lakh/article26206170.ece
https://timesofindia.indiatimes.com/business/india-business/ujjivan-small-finance-bank-launches-kisansuvidha-loan-product-for-small-and-marginal-farmers/articleshow/67758584.cms