Small business owners in India have received a major update from the Reserve Bank of India (RBI). Governor Sanjay Malhotra announced a proposal to double the collateral-free loan limit for micro and small enterprises (MSEs). This limit will go up from ₹10 lakh to ₹20 lakh, making it easier for entrepreneurs to get funds without pledging assets or property. The move aims to boost formal credit access for local businesses.
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When will the new loan limit apply?
The new loan limit will be effective for loans sanctioned or renewed from April 1, 2026. This change is particularly beneficial for businesses looking for capital under the Pradhan Mantri Mudra Yojana (PMMY) categories. By removing the need for collateral up to ₹20 lakh, the central bank wants to encourage entrepreneurship and generate more local employment.
- Effective Date: April 1, 2026
- Old Limit: ₹10 lakh
- New Limit: ₹20 lakh
- Benefit: No collateral or processing fees needed
Mission SAKSHAM and customer safety rules
Apart from loans, the RBI launched ‘Mission SAKSHAM’ on February 6, 2026. This is a massive training program for over 1.4 lakh employees of Urban Cooperative Banks (UCBs). The training will be provided in regional languages to improve skills and customer service in local banks.
The central bank also introduced draft guidelines to protect common people. These rules focus on stopping mis-selling of financial products and checking the behavior of loan recovery agents. There is also a proposal for compensation up to ₹25,000 for customers facing small-value digital frauds, making online payments safer for everyone.
