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From ₹20 Lakh Collateral-Free Loans to Safer Payments: India’s Banking System Gets a Major Upgrade
Pooja Srivastava | Anytime News Network |
The Reserve Bank of India (RBI) has rolled out an extensive set of developmental and regulatory policy measures aimed at strengthening India’s financial ecosystem across regulations, payments, financial inclusion, and markets.
Under regulatory reforms, the RBI has proposed stricter norms to curb mis-selling of financial products by banks and regulated entities. New guidelines will ensure that financial products offered to customers align with their risk appetite and needs. Additionally, the central bank plans to harmonize rules governing loan recovery agents to ensure ethical and uniform practices across institutions.
In response to rising cyber threats, RBI has announced a review of customer liability in digital transactions, including provisions for compensation in small-value fraud cases. A discussion paper on enhanced safeguards in digital payments is also in the pipeline, focusing on measures such as delayed credits and additional authentication for vulnerable users like senior citizens.
A major policy shift includes allowing banks to lend to Real Estate Investment Trusts (REITs), which is expected to unlock liquidity in the real estate sector. Simultaneously, low-risk NBFCs may receive regulatory exemptions, reducing compliance burdens and improving ease of doing business.
In a significant push to financial inclusion, the RBI has doubled the collateral-free loan limit for Micro and Small Enterprises (MSEs) from ₹10 lakh to ₹20 lakh, effective April 1, 2026. Reforms in the Kisan Credit Card (KCC) scheme aim to expand coverage, extend tenure to six years, and align credit limits with agricultural financing needs.
On the financial markets front, RBI plans to deepen the corporate bond market by introducing derivatives such as total return swaps and credit index products. It has also reviewed foreign exchange regulations to provide greater flexibility to authorized dealers and improved frameworks for foreign portfolio investments.
To strengthen cooperative banks, the RBI will launch Mission SAKSHAM, a large-scale capacity-building initiative targeting over 1.4 lakh personnel, enhancing skills, resilience, and operational efficiency.
Overall, these reforms signal RBI’s intent to build a more resilient, inclusive, and technologically secure financial system, supporting India’s growth trajectory while safeguarding customer interests.
