RBI revises priority sector lending norms; raises start-up funding limit to Rs50 cr
07 September 2020
Reserve Bank of India has undertaken a comprehensive review of the priority sector lending (PSL) guidelines to align it with emerging national priorities and bring sharper focus on inclusive development.
The revised PSL guidelines will enable better credit penetration to credit deficient areas; increase lending to small and marginal farmers and weaker sections; and boost credit to renewable energy and health infrastructure, RBI stated in a release.
Under the revised guidelines, bank finance to start-ups of up to Rs50 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.
In order to address regional disparities in the flow of priority sector credit, RBI has assigned higher weightage to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.
The targets prescribed for “small and marginal farmers” and “weaker sections” are also being increased in a phased manner.
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.
Loan limits for renewable energy and for improvement of health infrastructure (including those under ‘Ayushman Bharat’) have been doubled.
RBI said the decision to revise priority sector lending guidelines has been taken after wide ranging discussions with all stakeholders.