NO COLLATERAL FOR LOANS UP TO RS 5 LAKH TO SMEs: RBI

The Reserve Bank of India (RBI) has expressed concern over the fact that banks in the country
are asking for collateral while lending to SME sector when the amount is as low as Rs 5 lakh. Usha Thorat, Deputy Governor, RBI, said that banks are not supposed to insist on collateral security from SMEs for advances up to Rs. 5 Lakh but only take into account the viability of their projects while
granting loans.