The Reserve Bank of India (RBI) has released updated guidelines for Priority Sector Lending (PSL), aimed at improving the distribution of bank credit to key sectors of the Indian economy. The new regulations, set to take effect from April 1, 2025, are designed to enhance the effectiveness of lending to priority sectors.
In a statement released on Monday, the RBI highlighted that the “enhanced coverage of the revised guidelines is expected to facilitate better targeting of bank credit to the priority sectors of the economy.”
Key changes introduced in the revised norms include:
- Increased Loan Limits: Higher loan limits have been established for housing loans, allowing for broader PSL coverage.
- Expanded Renewable Energy Loans: The scope of loans classified under ‘renewable energy’ has been widened.
- Urban Cooperative Bank (UCB) Targets: The overall PSL target for UCBs has been revised to 60 percent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE), whichever is higher.
- Weaker Sections Expansion: The list of eligible borrowers under ‘Weaker Sections’ has been expanded, and the cap on loans to individual women beneficiaries by UCBs has been removed.
- Housing Sector Loans: Specific loan limits for housing have been set: Rs 50 lakh for centers with populations of 50 lakh and above, Rs 45 lakh for centers with populations between 10 and 50 lakh, and Rs 35 lakh for centers with populations below 10 lakh. Maximum dwelling unit costs have also been defined.
- Renewable Energy Loans: Loans up to Rs 35 crore for renewable energy-based power generators and public utilities, and up to Rs 10 lakh for individual households, will qualify for priority sector classification.
The priority sectors covered by these guidelines include agriculture, Micro, Small, and Medium Enterprises (MSMEs), export credit, education, housing, social infrastructure, and renewable energy.
(With PTI Inputs)