The Reserve Bank of India (RBI) on Friday released revised priority sector lending (PSL) guidelines to augment funding for COVID-19 impacted companies.
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This has come after a comprehensive review of the PSL guidelines “to align them with emerging national priorities and bring sharper focus on inclusive development, after having wide ranging discussions with all stakeholders,” the RBI said.
The revised guidelines will enable better credit penetration to credit deficient areas, increase lending to small and marginal farmers and weaker sections, boost credit to renewable energy, and health infrastructure, it said.
Bank finance for 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 Bio Gas (CBG) plants have been included as fresh categories eligible for finance under the priority sector.
The revised guidelines have been framed to address regional disparities in the flow of priority sector credit. Higher weightage has 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 and higher credit limit has been specified for Farmer Producer Organisations (FPOs)/Farmer Producer Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.
Besides, loan limits for renewable energy have been doubled and for improvement of health infrastructure, credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled.
Commercial banks have been instructed to adhere to the revised guidelines.
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