RBI revises Priority Sector Lending (PSL) Guidelines, fresh categories included

Today (September 4, 2020) announced that PSL guidelines have been comprehensively reviewed 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 the lending to small and marginal farmers and weaker sections; boost credit to renewable energy, and health infrastructure,” it said.

The salient feature of new guidelines

• Bank finance start-ups up to Rs.50 Crore included as eligible for finance under the priority sector
• Loans to farmers for the installation of solar power plants for the solarisation of grid-connected agriculture pumps are included as eligible for finance under the priority sector
• Loans for setting up Compressed Bio-Gas (CBG) plants are included as eligible for finance under the priority sector
• Higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low. This is to address regional disparities in the flow of priority sector credit.
• The targets prescribed for “small and marginal farmers” and “weaker sections” are being increased in a phased manner.
• A higher credit limit has been specified for the ‘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 have been doubled as eligible for finance under the priority sector.
• The credit limit for the improvement of health infrastructure (including those under ‘Ayushman Bharat’) has been doubled.

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