Priority Sector Lending Guidelines got revised by RBI

The Priority Section Lending (PSL) Guidelines got revised by the Reserve Bank of India (RBI). A thorough study was conducted about the priority section lending guidelines to adjust with the emerging priorities of the country as it was discussed with all the stakeholders that can result in the inclusive development of the nation.

According to the new revised Priority Section Lending (PSL) guidelines can help in making the Credit Penetration better in the credit deficient areas that could result in boosting the credit to renewable energy, and health infrastructure and might also increase the lending facility to small and marginal farmers.

Under the PSL Guidelines, new categories were created to provide finance option through banks for the start-ups for up to the amount of Rs.50 Crores, provide the 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.

Characteristics of the revised Priority Section Lending (PSL) guidelines are as follows-

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.

With Warm Regards,

CL Bureau.