The Reserve Bank of India (RBI) has increased the collateral-free loan limit for farmers from ₹1.6 lakh to ₹2 lakh, effective January 1, 2025. This change aims to support small and marginal farmers facing rising farming costs. Banks across India have been instructed to offer these loans without requiring collateral or margin money, benefiting over 86% of farmers. The initiative will also simplify access to Kisan Credit Card (KCC) loans and work in conjunction with the government's Modified Interest Subvention Scheme, which offers loans up to ₹3 lakh at a reduced interest rate of 4%.