RBI Proposes Hike in Unsecured Loan Limit for UCBs to 20%
RBI releases draft norms allowing Urban Cooperative Banks to raise unsecured loan exposure from 10% to 20% of assets, with limits for priority sector loans
Feb 12, 2026 - The Reserve Bank of India (RBI) released a draft on February 10 proposing revisions to loan norms for Urban Cooperative Banks (UCBs). Under the proposal, UCBs may be allowed to increase the share of unsecured loans (loans without collateral) in their total assets from the current 10% to up to 20%.
However, the RBI clarified that any unsecured lending beyond this limit would be permitted only for eligible priority sector loans, subject to a monetary cap of Rs 50,000 per borrower.
The draft also proposes increasing the loan limit for the purchase of consumer durable goods to Rs 2.5 lakh per borrower.
Source: Media Reports
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