Agricultural Loan Margin/Security Waiver Limit Doubled to Rs 1 Lakh
Current · Source: Reserve Bank of India · RBI/2009-10/499 · issued 18 Jun 2010 · ~1 min read
Quick answerRBI has doubled the threshold for waiving margin and security requirements on agricultural loans from Rs 50,000 to Rs 1,00,000, effective immediately. Banks must update their lending policies and communicate the change to all branches.
The rule, in the simplest words
Banks can now waive margin and security requirements for agricultural loans up to Rs 1,00,000.
This change applies to all scheduled commercial banks, including RRBs and local area banks.
Banks must update their lending policies and communicate the change to all branches.
How it plays out — a real example
Rahul, an agri & priority-sector lending officer in Indore, is now able to extend agricultural loans up to Rs 1,00,000 without insisting on margin or collateral. This means he can provide faster credit delivery to small and marginal farmers in his region, improving their access to formal credit.
What changed
The previous limit of Rs 50,000 for waiving margin and security on agricultural loans has been increased to Rs 1,00,000. This modification applies to all scheduled commercial banks, including RRBs and local area banks, with immediate effect.
What it means for you
Banks can now extend agricultural loans up to Rs 1,00,000 without insisting on margin or collateral, reducing paperwork and faster credit delivery to small and marginal farmers. This eases compliance for lenders and improves access to formal credit for the agriculture sector.
What you must do
Update internal lending policies and loan sanctioning guidelines to reflect the new Rs 1,00,000 waiver limit.
Communicate the change to all controlling offices and branches with immediate implementation instructions.
Ensure adequate publicity of the revised limit through bank notices, website updates, and farmer outreach programs.
Monitor compliance to ensure no margin/security is demanded for agricultural loans up to Rs 1,00,000.
Who it affects
All Scheduled Commercial Banks (including RRBs), Local Area Banks, Agricultural loan borrowers (especially small and marginal farmers), Bank branch managers and credit officers
❓ Common questions
Does this circular apply to all types of agricultural loans?
Yes, the waiver applies to all agricultural loans as defined in the original circular of May 18, 2004, subject to the new limit of Rs 1,00,000.
Are there any other conditions that remain unchanged?
Yes, all other conditions from the earlier circular (RPCD.Plan. BC. No. 87/04.09.01/2003-04) remain in force. Only the margin/security waiver limit has been revised.
When must banks implement this change?
The circular is effective immediately from June 18, 2010. Banks are required to instruct their branches and give adequate publicity without delay.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/499
RPCD.PLFS. BC. No. 85/05.04.02/2009-10
June 18, 2010
The Chairman /Managing Director/ Chief Executive Officer
All Scheduled Commercial Banks (including RRBs) and Local Area Banks
Dear Sir,
Credit Flow to Agriculture – Agricultural Loans – Waiver of Margin/Security Requirements
Please refer to our circular RPCD.Plan. BC. No. 87/04.09.01/2003-04 dated May 18, 2004 on the captioned subject.
2. On the basis of representations received seeking enhancement of limits, it has been decided that banks may waive margin/security requirements for agricultural loans from the existing level of Rs. 50,000/- to Rs. 1,00,000/- with immediate effect. Para 3 of our above circular, therefore, stands suitably modified.
3. All other conditions of the above circular remain unchanged.
4. You are requested to give adequate publicity to this change and instruct your controlling offices/branches to implement the same immediately.
5. Please acknowledge receipt.
Yours faithfully,
(B.P.Vijayendra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/499 · issued 18 Jun 2010. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the change to all controlling offices and branches with immediate implementation instructions.
💰 Credit
Update internal lending policies and loan sanctioning guidelines to reflect the new Rs 1,00,000 waiver limit.
📜 Compliance
Ensure adequate publicity of the revised limit through bank notices, website updates, and farmer outreach programs.
Monitor compliance to ensure no margin/security is demanded for agricultural loans up to Rs 1,00,000.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Credit Manager at a bank this circular applies to (All Scheduled Commercial Banks (including RRBs), Local Area Banks, Agricultural loan borrowers (especially small and marginal farmers), Bank branch managers and credit officers), your first concrete step on “Agricultural Loan Margin/Security Waiver Limit Doubled to Rs 1 Lakh” is: “Update internal lending policies and loan sanctioning guidelines to reflect the new Rs 1,00,000 waiver limit.” (RBI issued this 18 Jun 2010).
Action required: Update internal lending policies and loan sanctioning guidelines to reflect the new Rs 1,00,000 waiver limit.
Action required: Communicate the change to all controlling offices and branches with immediate implementation instructions.
Action required: Ensure adequate publicity of the revised limit through bank notices, website updates, and farmer outreach programs.
Action required: Monitor compliance to ensure no margin/security is demanded for agricultural loans up to Rs 1,00,000.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5732&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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