The Reserve Bank of India (RBI) has rolled out updated Priority Sector Lending (PSL) guidelines that will take effect on April 1, 2025. These new rules are all about making credit more accessible to key sectors like agriculture, MSMEs, renewable energy, housing, education, and social infrastructure. With these revisions, we’re seeing higher loan limits, an expanded ‘Weaker Sections’ category, and updated PSL targets for urban cooperative banks (UCBs). The goal here is to enhance financial inclusion and drive economic growth in vital areas.
Key Highlights of RBI’s Revised PSL Guidelines
1. Enhancement of Loan Limits
- Education Loans: Increased limit to ₹25 lakh per individual (including vocational courses).
- Social Infrastructure: Up to ₹8 crore per borrower for setting up schools, drinking water facilities, etc.
- Housing Loans (Priority sector classification based on population size):
- ₹50 lakh – Centers with a population of 50 lakh and above.
- ₹45 lakh – Centers with a population between 10 lakh and 50 lakh.
- ₹35 lakh – Centers with a population below 10 lakh.
2. Focus on Renewable Energy
- Loans up to ₹35 crore for renewable energy-based power generators and public utilities (e.g., street lighting systems, remote village electrification).
- Loan limit for individual households: ₹10 lakh per borrower.
3. Revised PSL Targets for Urban Cooperative Banks (UCBs)
– The total PSL target is now 60% of Adjusted Net Bank Credit (ANBC) or the Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE).
– Micro Enterprises are required to meet 7.5% of ANBC.
– Advances to Weaker Sections must account for 12% of ANBC.
4. Expansion of the ‘Weaker Sections’ Category
– The updated definition now includes transgenders, along with:
– Small & Marginal Farmers.
– Distressed farmers who owe money to non-institutional lenders.
– Artisans.
– Individual members of Self-Help Groups (SHGs) or Joint Liability Groups (JLGs).
– Scheduled Castes (SC) & Scheduled Tribes (ST).
– Persons with disabilities.
– Minority communities recognized by the Government of India.
– Individual women beneficiaries can receive up to ₹2 lakh (Note: This limit does not apply to UCBs).
