Question
The Reserve Bank of India (RBI) doubled the limit for
collateral-free loans to micro and small enterprises (MSEs) from 5 lakhs to 10 lakhs following which committees' recommendation?Solution
In 2010, the Reserve Bank of India (RBI) has increased the limit for collateral-free loans to Micro and Small Enterprises (MSEs) from ₹5 lakh to ₹10 lakh. This decision aligns with the recommendations of an RBI-constituted working group led by Executive Director V.K. Sharma. Banks are now mandated not to accept collateral security for loans up to ₹10 lakh extended to MSE units.
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