- The Reserve Bank of India (RBI) has issued revised Priority Sector Lending (PSL) guidelines, set to take effect from April 1, 2025.
- These guidelines have been introduced under the authority granted by Sections 21 and 35A, read with Section 56 of the Banking Regulation Act, 1949.
- The revisions focus on enhancing credit accessibility, increasing loan limits, and expanding the scope of PSL categories.
Key Changes in Priority Sector Lending (PSL) Guidelines
1. Enhancement of Loan Limits
RBI has increased the maximum loan limits across multiple priority sectors:
- Education Loans: Up to ₹25 lakh per individual, covering vocational courses as well.
- Social Infrastructure Loans: Up to ₹8 crore per borrower for projects like school construction, drinking water facilities, and sanitation infrastructure.
- Other Sectors: Increased loan limits for housing and agriculture loans to improve financial accessibility in these sectors.
2. Greater Focus on Renewable Energy
To promote sustainability, PSL guidelines now prioritize renewable energy projects:
- Funding for Renewable Energy-Based Power Generators & Public Utilities:
- Loans up to ₹35 crore for renewable energy-based power plants, street lighting systems, and village electrification projects.
- Support for Individual Households:
- Loan limit of ₹10 lakh per household for renewable energy installations.
3. Revised PSL Targets for Urban Co-operative Banks (UCBs)
Urban Co-operative Banks (UCBs) now have higher PSL targets, ensuring more credit flow into priority sectors:
- Total Priority Sector Lending: 60%
- Micro Enterprises: 7.5%
- Advances to Weaker Sections: 12%
4. Expansion of the ‘Weaker Sections’ Category
The definition of Weaker Sections has been broadened to include transgender individuals, alongside the existing categories:
- Small & Marginal Farmers
- Distressed Farmers (indebted to non-institutional lenders)
- Artisans
- Members of Self-Help Groups (SHGs) and Joint Liability Groups (JLGs)
- Scheduled Castes (SCs) & Scheduled Tribes (STs)
- Persons with Disabilities
- Minority Communities (as per Government of India notifications)
- Individual Women Beneficiaries (up to ₹2 lakh) – Not applicable to UCBs
Priority Sector Lending Targets & Sub-Targets
|
Categories |
Domestic Commercial Banks & Foreign Banks (≥20 branches) |
Foreign Banks (<20 branches) |
Regional Rural Banks (RRBs) |
Small Finance Banks (SFBs) |
| Total PSL |
40% |
40% (Up to 32% in Export Credit) |
75% |
75% |
| Agriculture |
18% |
Not Applicable |
18% |
18% |
| Micro Enterprises |
7.5% |
Not Applicable |
7.5% |
7.5% |
| Weaker Sections |
12% |
Not Applicable |
15% |
12% |
Note: The percentages mentioned above are calculated based on Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE), whichever is higher.
