RBI Hikes Collateral-Free Loan Limit for MSMEs to ₹20 Lakh; Repo Rate Unchanged

• The Reserve Bank of India (RBI) has increased the collateral-free loan limit for Micro, Small and Medium Enterprises (MSMEs) from ₹10 lakh to ₹20 lakh.
• This move aims to improve credit access for small businesses by reducing security requirements, as announced by RBI Governor Sanjay Malhotra.
• The revised limit will apply to loans sanctioned or renewed on or after April 1, 2026, for all small borrowers.
• A collateral-free business loan is an unsecured loan that does not require mortgaging assets as security.
• The Monetary Policy Committee (MPC) kept the repo rate stable at 5.25 percent, meaning no immediate change in EMI for home, vehicle, and commercial loans.