MUMBAI: The Reserve Bank of India has issued revised priority sector lending (PSL) guidelines, set to take effect from April 1, 2025, to improve credit flow to key sectors of the economy.
The updated framework of priority sector lending enhances loan limits across multiple categories, including housing and renewable energy, and broadens eligibility criteria for priority sector classification.
Key changes include:
- Higher loan limits for housing:
- Up to Rs50 lakh for metro cities with a population of 50 lakh and above.
- Up to Rs45 lakh for cities with 10 lakh to 50 lakh residents.
- Up to Rs35 lakh for smaller towns with a population below 10 lakh.
- Maximum property cost limits have also been defined for each category.
- Expanded renewable energy coverage:
- Bank loans up to Rs 35 crore for renewable energy projects and public utilities now qualify.
- Individual borrowers can avail loans up to Rs 10 lakh for renewable energy purposes.
- Revised targets for urban cooperative banks:
- The priority sector lending target has been raised to 60 per cent of adjusted net bank credit or credit equivalent of off-balance sheet exposures, whichever is higher.
- Stronger focus on weaker sections:
- The list of eligible beneficiaries has been expanded.
- The cap on loans to individual women borrowers by urban cooperative banks has been removed.
The priority sector framework covers areas such as agriculture, MSMEs, export credit, education, housing, social infrastructure, and renewable energy, ensuring improved access to credit where it is most needed.
