In order to help small and marginal farmers access credit, the Reserve Bank of India raised the unsecured agricultural loan limit to Rs 1.6 lakh from the existing Rs 1 lakh on Thursday.
The Central Bank plans to establish an internal working group (CBI) to review agricultural credit and create a viable policy solution.
Taking into account general inflation that leads to an increase in the costs of inputs, the limit for unsecured loans has been raised. “This will improve the coverage of small and marginal farmers in the formal credit system,” said the “Declaration on development policies and regulations” of the Central Bank.
In announcing the formation of ICW, RBI said there is a problem of deepening long-term agricultural credit for capital formation.