RBI releases revised Priority Sector Lending Guidelines

The Priority Sector Lending (PSL) Guidelines have been reviewed by the Reserve Bank of India. The review was executed to align the PSL Guidelines with evolving national priorities. The new guidelines will make better credit penetration into credit deficient areas and increase the lending to small as well as marginal farmers and weaker sections. It will also enhance credit to renewable energy, and health infrastructure.

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In the revised PSL Guidelines, the Reserve Bank of India has included some fresh categories eligible for finance under priority sector. These include loans to farmers for installation of solar power plants; loans for establishment of Compressed Bio Gas (CBG) plants; and bank finance to start-ups of up to Rs 50 crore.

Some key features of revised PSL guidelines are as follows:

To address the issue of 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 relatively low.
The targets stipulated for “small and marginal farmers” as well as “weaker sections” are being increased in a phased manner.
Credit limit has been raised for the Farmers Producers Organisations (FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.
The loan limits for renewable energy have been doubled.
The credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled to improve the health infrastructure.

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