Current Affairs
Daily Bits

Priority Sector Lending Guidelines

  • Posted By
  • Categories
  • Published
    8th Aug, 2020
  • Under Priority Sector Lending (PSL) guidelines, banks have to set aside a specific portion of bank lending to sectors deemed important by the central bank.
  • The following are the categories listed by RBI under PSL
    • Agriculture
    • Micro, Small and Medium Enterprises
    • Export Credit
    • Education
    • Housing
    • Social Infrastructure
    • Renewable Energy
  • All scheduled commercial banks and foreign banks with a sizeable presence in India are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) for lending to these sectors.
  • RBI has recently assigned PSL status to India’s start-up sector.
  • Start-ups were considered under the MSME category and were required to show three years of profitability
  • RBI also recently increased the limits for renewable energy, including solar power and compressed bio-gas plants.
  • Higher weighting will be assigned to incremental priority sector credit in identified districts where credit flow is comparatively lower.
  • Whereas a lower weighting will be assigned in case of a comparatively higher credit flow.

Verifying, please be patient.