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RBI RELEASES REVISED PRIORITY SECTOR LENDING GUIDELINES

RBI RELEASES REVISED PRIORITY SECTOR LENDING GUIDELINES

Context

Reserve Bank of India has comprehensively reviewed the Priority Sector Lending (PSL)

Details

  • Reviewed guidelines will align it with emerging national priorities and bring sharper focus on inclusive development, after having wide ranging discussions with all stakeholders.
  • It 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.
  • Bank finance to start-ups (up to ₹50 crore); loans to farmers for installation of solar power plants for solarisation of grid connected agriculture pumps and loans for setting up Compressed BioGas (CBG) plants have been included as fresh categories eligible for finance under priority sector.

Salient features of revised PSL guidelines

  • Higher weightage have been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.
  • The targets increases in phased manner  for “small and marginal farmers” and “weaker sections”
  • 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.
  • Loan limits for renewable energy have been increased (doubled).
  • Credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled.

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