Limit for collateral free lending should be increased to Rs 20 lakh for MSMEs, SHGs: RBI Committee

New Delhi, July 25 (KNN) A Committee constituted by Reserve Bank of India (RBI) has recommended revision of collateral free lending limit for Micro Small and and Medium Enterprises (MSME) sector, said Nitin Gadkari, Union Minister for MSME.

In a written reply to Lok Sabha, Gadkari said “A Committee constituted by Reserve Bank of India (RBI) has submitted its report to the RBI wherein it has been recommended that the limit for collateral free lending should be increased to Rs 20 lakh for Micro Small and Medium Enterprises (MSMEs) and Self-Help Groups (SHGs).

The Committee has also recommended revision of loan limit sanctioned under MUDRA to Rs 20 lakh from Rs 10 lakh, he added.

The RBI set up eight-member expert committee under former SEBI chairman U.K. Sinha to propose long term solutions for the economic and financial sustainability of the sector.