RBI NEW GUIDELINES FOR PRIORITY SECTOR LENDING
                     RBI  NEW  GUIDELINES  FOR  PRIORITY  SECTOR  LENDING
WHAT IS PRIORITY SECTOR LENDING?
• 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.
Source: Deccanherald.com
Priority Sector Lending
• Priority Sector refers to those sectors of the economy which may not get timely 
and adequate credit.
• Priority Sector Lending is an important role given by the Reserve Bank of India 
(RBI) to the banks for providing a specified portion of the bank lending to few 
specific sectors.
Source: Neo
CATEGORIES OF PRIORITY SECTOR LENDING?
• As per the RBI guideline, there are eight broad categories of the Priority Sector Lending.
– Agriculture
– Micro Small and Medium Enterprises
– Export Credit
– Education
– Housing
– Social Infrastructure
– Renewable Energy
– Others
Source: YouTube
REVISED PSL
• Revised PSL guidelines 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.
Source: YouTube
 LIMIT FOR 
EDUCATION • Loans to individuals for educational 
purposes including vocational courses 
UNDER upto ₹ 1 million irrespective of the 
sanctioned amount are eligible for 
PRIORITY classification under priority sector.
SECTOR
Source: Deccanherald.com
REVISED GUIDELINES
• Bank finance to start-ups (up to ₹50 crore); loans to farmers for installation of solar power 
plants for solarization 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.
Source: Business Standard
SALIENT FEATURES
• 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
Source: Mkerj
CREDIT LIMITS
• Higher credit limit has been specified for Farmers Producers Organizations 
(FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured 
marketing of their produce at a pre-determined price.
Source: Deccanherald.com
LOAN LIMITS
• Loan limits for renewable energy have been 
increased (doubled).
• For improvement of health infrastructure, 
credit limit for health infrastructure 
(including those under ‘Ayushman Bharat’) 
has been doubled.
Source: Housing.com
ACCESS TO FUNDS
• The startups are likely to gain in the form of greater and easier access to funds, given the 
commercial banks, including foreign ones are required to mandatorily reserve 40 per cent 
of the adjusted net bank credit for PSL activity.
• Furthermore, regional rural banks and small finance banks will have to now allocate 75 per 
cent of their adjusted net bank credit for PSL.
Source: Climasouth