RBI Revises Priority Sector Lending Norms: Effective April 1

Mumbai, Mar 24 (PTI) The Reserve Bank on Monday issued revised guidelines on Priority Sector Lending (PSL) to facilitate better targeting of bank credit to the priority sectors of the economy.

The new guidelines will come into effect from April 01, 2025, the RBI said.

"The enhanced coverage of the revised guidelines is expected to facilitate better targeting of bank credit to the priority sectors of the economy," the RBI said in a statement.

The major changes in the new norms include the enhancement of several loan limits, including housing loans for enhanced PSL coverage and the broadening of the purposes based on which loans may be classified under 'renewable energy'.

There is also a revision of the overall PSL target for urban cooperative banks (UCBs) to 60 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE), whichever is higher.

The revised norms also expanded the list of eligible borrowers under the category of 'Weaker Sections', along with the removal of the existing cap on loans by UCBs to individual women beneficiaries.

Bank loans to the housing sector for priority sector classification have been prescribed in three categories -- Rs 50 lakh (centres with a population of 50 lakh and above), Rs 45 lakh (centres with a population of 10 lakh and above but below 50 lakh) and Rs 35 lakh (centres with a population below 10 lakh).

The maximum cost of dwelling units too has been specified in each case.

On renewable energy, the guidelines said bank loans up to a limit of Rs 35 crore to borrowers for renewable energy-based power generators and for renewable energy-based public utilities will be eligible for priority sector classification. For individual households, the loan limit will be Rs 10 lakh per borrower.

The categories under the priority sector include agriculture, MSME, export credit, education, housing, social infrastructure, and renewable energy.