BLOG
Government & RBI increase limits of collateral free loans
RBI has recently announced increase in limit for collateral free loan for agriculture from ₹1.6 lakh to ₹2 lakh, effective from 1st January 2025. This decision has been undertaken to address pressure of escalating cost in agriculture for small and marginal farmers who account for over 86% of farming community. Consequently, banks are been advised to waive collateral and margin requirement for loans under mentioned threshold in a timely manner.
Government is embarking on increasing limit under zero collateral housing loan scheme for low & middle income groups. Currently, eligible borrowers are offered collateral free loan upto ₹7 lakh without collateral; this limit is expected to be revised to ₹20 lakhs with minimal documentation or third party guarantee.
Increase in credit guarantee limit increasing the scope of the scheme bringing in higher number of beneficiaries in the ambit of financialization. From lenders perspective, increase in guarantee is seen aiding business growth in specific retail segments as the schemes provides cushion against asset quality shocks by providing guarantee. Largely, we expect banks, especially public sector banks and HFC engaged in affordable housing should remain as beneficiaries of extension in credit limits.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.