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Limit for Collateral-free Loans to MSE Doubled

In an attempt to meet the funding requirements of the fund starved MSEs, the RBI doubled the limit for collateral-free loans from 5 lakhs to Rs 10 lakh to the micro and small enterprises (MSEs) on 15 April 2010. The measure was adopted following following the recommendations of an RBI-constituted working group headed by one of the executive directors of the central bank VK Sharma.

Oct 22, 2010 16:12 IST
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In an attempt to meet the funding requirements of the fund starved MSEs, the RBI doubled the limit for collateral-free loans from 5 lakhs to Rs 10 lakh to the micro and small enterprises (MSEs) on 15 April 2010. The measure was adopted following following the recommendations of an RBI-constituted working group headed by one of the executive directors of the central bank VK Sharma. This was made mandatory for all banks. Banks, in turn, was permitted to take cover for the collateral-free credit facilities under the credit guarantee scheme of the Credit Guarantee Fund Trust for MSEs.