RBI revises Priority Sector Lending guidelines

The Reserve Bank of India (RBI) on September 4, 2020 released revised priority sector lending guidelines. The objective of this revision is to augment funding to segments including start-ups and agriculture.

New Entries

• Bank finance of up to ₹50 crore to start-ups, loans to farmers both for installation of solar power plants for solarisation of grid-connected agriculture pumps, and for setting up compressed biogas (CBG) plants are new entries.

• The targets prescribed for ‘small and marginal farmers’ and ‘weaker sections’ are being increased in a phased manner and higher credit limit has been specified for farmer producer organisations (FPOs)/farmers producers companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.

• Loan limits for renewable energy have been doubled.

• Priority sector loans refer to loans that banks need to mandatorily lend to economically weaker sections of the society.

(Source: AIR)