RBI revises priority sector lending guidelines to increase credit penetration; startups to get up to Rs 50 cr

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For improvement of health infrastructure, credit limit for health infrastructure including those under Ayushman Bharat has been doubled

The Reserve Bank of India (RBI) on Friday issued revised guidelines for priority sector lending in a bid to enhance funding facilities for the businesses and small and marginal farmers besides weaker sections that have been hit by COVID-19 outbreak.

The central bank comprehensively reviewed the PSL guidelines to align it with emerging national priorities and bring sharper focus on inclusive development, after having wide ranging discussions with all stakeholders.

In addition, the initiative will boost credit to renewable energy and health infrastructure.

The RBI said bank finance to startups 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 has been assigned to incremental priority sector credit in identified districts where priority sector credit flow is comparatively low,” RBI said.

Besides, the targets prescribed for small and marginal farmers and weaker sections are being increased in a phased manner. Higher credit limit has been specified for farmers producers organisations and companies undertaking farming with assured marketing of their produce at a pre-determined price.

Loan limits for renewable energy have been doubled. For improvement of health infrastructure, credit limit for health infrastructure including those under Ayushman Bharat has been doubled.

The central bank said it comprehensively reviewed the PSL guidelines to align it with emerging national priorities and bring sharper focus on inclusive development after having wide-ranging discussions with all stakeholders.

Image credit: Financial Express

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