RBI Doubles Collateral-Free MSME Loans to Rs 20 Lakh from April 2026

• Reserve Bank of India (RBI) Governor Sanjay Malhotra announced doubling the collateral-free loan limit for Micro and Small Enterprises (MSEs) from Rs 10 lakh to Rs 20 lakh.
• This enhancement aims to improve access to formal credit, support entrepreneurial activity, and strengthen last-mile credit delivery for MSEs.
• The new provisions will apply to all MSE loans sanctioned or renewed on or after April 1, 2026, with detailed instructions to be issued soon.
• RBI is also reviewing regulatory guidelines for Business Correspondents based on committee recommendations to enhance their efficiency in serving rural and remote areas.
• Additionally, the Kisan Credit Card (KCC) Scheme is being revised to expand coverage, streamline operations, and include technological interventions, with draft guidelines to be issued shortly.