RBI New Rules: The Reserve Bank of India has now issued strict instructions to the banks by changing the rules related to loans, according to which now small traders and farmers will be greatly affected. New rules have been issued by the RBI as per the new circular. Now new rules have been added by the bank for agriculture and MSME loans, according to which now this rule has changed the rules for farmers and traders. RBI changes the rules related to loans from time to time, due to this, currently there has been a change in the rules related to loans taken by farmers and traders.
RBI has also issued strict instructions to all the banks, according to which the Reserve Bank of India has now changed the rules of MSME loans. These rules have been implemented by the Reserve Bank of India to provide easy loans to strengthen the micro, small and medium industries in the country, according to which the revised rules will be beneficial to increase transparency and reduce the burden of the lenders. These changes will also lead to strict action on the banks so that the instructions of RBI can be followed effectively and all the people can get loans easily.
New rules for loan process
According to RBI New Rules, now it is allowed to accept any kind of gold and silver as collateral for small loans. Even if the loan comes under the collateral free category, you can pledge gold, silver and coins as per your wish. Currently, according to the notice issued on 11th July, it is clear that for agricultural and business loans, the borrower can use gold or silver as collateral. With this rule, you can now benefit from personal assets to improve your credit and negotiate better terms and also get the benefit of collateral free loan.
RBI has also clarified that the borrowers will not be forced to mortgage by the banks, it will completely depend on the wish of the borrower. This new rule will make loan approval easier for small businesses and RBI has also banned the fee levied on prepayment or foreclosure of plot rate loans of financial institutions i.e. depositing the entire amount before the loan period. This rule will be applicable to the persons getting approved and new loans after January 1, 2026. This will reduce the financial burden on the borrowers and they will get the facility to repay their loan before time without any penalty.
Impact on farmers and traders
The aim is to reduce the currently rising loan rate by more effectively controlling the leverage so as to take advantage of the changing interest rates in the market and as per the new digital lending guidelines, NBFCs are now prohibited from entering into any kind of default loss guarantee arrangement for loans backed by credit guarantee schemes, which will require keeping higher provisions for possible loan defaults and will strengthen the financial startups.
In order to promote transparency in the loan process, new facts have been provided to banks and retail lenders that can be presented in easy to understand and user-friendly formats on the loan agreement which also includes the interest rate and annual percentage rate in the cost of the loan.
The changes issued by RBI are a positive change for farmers and traders as it will reduce the burden of increased provisions and will be very beneficial for easy, transparent and favorable loan as per the guidelines.
