RBI Releases Priority Sector Lending Guidelines (Download PDF)

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RBI Releases Priority Sector Lending Guidelines

  • The RBI recently released revised Priority Sector Lending guidelines.
  • The review was done to align the PSL guidelines with evolving national priorities.
  • The new guidelines will make better credit penetration into credit deficient areas.
RBI Issues Priority Sector Lending Guidelines

Provisions of New Guidelines

  • The new guidelines will increase the lending to small as well as marginal farmers and weaker sections.
  • It will also enhance credit to
    • Renewable energy
    • Health infrastructure
  • The revised guidelines have included some other categories eligible for finance under priority sector.
  • These categories include
    • Loans to farmers for installation of solar power plants
    • Loans for establishment of Compressed Bio Gas (CBG) plants
    • Bank finance to start-ups of up to ₹ 50 crore
  • Some key features of revised PSL guidelines are
    • To address the issue of regional disparities in the flow of priority sector credit.
    • Higher weightage has been assigned by RBI to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is relatively low.
    • The targets stipulated for “small and marginal farmers” as well as “weaker sections” are being increased in a phased manner.
    • For the Farmers Producers Organizations (FPOs) /Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price, credit limit has been raised.
    • For renewable energy, loan limits have been doubled.
    • For improving the health infrastructure, the credit limit for health infrastructure has been doubled.

- Published/Last Modified on: March 10, 2021

Economy, International Relations/Organizations

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