RBI Releases Revised Priority Sector Lending Guidelines

The Reserve Bank of India ( RBI ) has revised the priority section lending Guidelines. The RBI has comprehensively reviewed the Priority Sector Lending ( PSL ) Guidelines to align it with emerging national priorities and bring a sharper focus on inclusive development, after having wide-ranging discussions with all stakeholders.

Revised PSL guidelines will enable better credit penetration to credit deficient areas; increase lending to small and marginal farmers and weaker sections; boost credit to renewable energy, and health infrastructure.

Bank finance to start-ups (up to ₹50 crore); loans to farmers for installation of solar power plants for solarisation of grid-connected agriculture pumps and loans for setting up Compressed Bio-Gas (CBG) plants have been included as fresh categories eligible for finance under priority sector. Some of the salient features of revised PSL guidelines are:

1. To address regional disparities in the flow of priority sector credit, higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.
2. The targets prescribed for “small and marginal farmers” and “weaker sections” are being increased in a phased manner.
3. A higher credit limit has been specified for Farmers Producers Organisations (FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.
4. Loan limits for renewable energy have been increased (doubled).
5. For the improvement of health infrastructure, the credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled.