RBI Boosts MSEs: Collateral-Free Loans Up To Rs 20 Lakh, Extends To Rs 25 Lakh

• RBI allows collateral-free loans up to Rs 20 lakh for Micro and Small Enterprises (MSE) sector.
• Banks are mandated not to accept collateral security for loans up to Rs 20 lakh to MSEs.
• Collateral-free loans up to Rs 20 lakh also extended to units under Prime Minister Employment Generation Programme (PMEGP).
• Banks can increase collateral-free limit to Rs 25 lakh for MSEs with good track record and financial position.
• Amendment effective for loans sanctioned or renewed on or after April 01, 2026.