The Reserve Bank of India has mandated Non-Bank Finance Companies (NBFCs) to strictly adhere to a Rs. 20,000 limit in cash loans.

• This directive aims to deter cash transactions, supporting the rise of the digital economy and mitigating the spread of black money within the financial system.
• The Reserve Bank of India (RBI) has intensified its monitoring of non-compliant lenders to safeguard customer interests and prevent the accumulation of systemic risk.
• The RBI reiterated the legal framework, citing Section 269SS of the Income Tax Act, 1961, which prohibits individuals from receiving more than 20,000 rupees as a loan amount in cash.