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India's central bank revises priority sector lending guidelines
The central bank will introduce changes including an enhancement of loan limits in multiple categories such as housing to enhance broader PSL coverage.
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Reuters - Mon, 24, Mar 2025
- 16:17 EDT
- 101
FILE PHOTO: A Reserve Bank of India (RBI) logo is seen inside its headquarters in Mumbai, India, April 6, 2023. / REUTERS/Francis Mascarenhas
The Reserve Bank of India on March 24 issued revised guidelines on priority sector lending, in a move to expand PSL's coverage and increase loan limits across sectors.
The updated rules will take effect from April 1, and follow a comprehensive review of existing provisions and stakeholder feedback, the RBI said.
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The central bank will introduce changes including an enhancement of loan limits in multiple categories such as housing to enhance broader PSL coverage.
The revised framework also expands the scope of loans classified under the renewable energy sector.
Additionally, the RBI will raise the overall PSL target for urban cooperative banks to 60 percent of adjusted net bank credit (ANBC) or credit equivalent of off-balance sheet exposures (CEOBSE), whichever is higher, to reinforce credit flow to critical segments of the economy.
Further, the RBI has expanded the list of eligible borrowers under the 'weaker sections' category. It also removed the existing cap on loans by urban cooperative banks to individual women beneficiaries.
"The enhanced coverage of the revised guidelines is expected to facilitate better targeting of bank credit to the priority sectors of the economy," the central bank said.
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