Reserve Bank of India (RBI) has comprehensively reviewed the Priority Sector Lending (PSL) guidelines to enable better credit penetration to credit deficient areas and increase the lending to small and marginal farmers and weaker sections.
The revised guidelines’ focus is to boost credit to renewable energy, and health infrastructure, RBI said.
The revised PSL norms are aimed at aligning the same with “emerging national priorities and bring sharper focus on inclusive development, after having wide-ranging discussions with all stakeholders”, the central bank said in a statement.
The RBI said bank finance to start-ups up to Rs 50 crore; loans to farmers for installation of solar power plants for solarisation of grid-connected agriculture pumps and loans for setting up Compressed Bio-Gas (CBG) plants have been included as fresh categories eligible for finance under priority sector.
To address regional disparities in the flow of priority sector credit, higher weightage have been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low. The targets prescribed for “small and marginal farmers” and “weaker sections” are being increased in a phased manner.