RBI revised Priority Sector Lending (PSL) guidelines
Context:
Recently, the Reserve Bank of India (RBI) revised its Priority Sector Lending (PSL) guidelines which would be effective from April 1, 2025.
- The changes were made to ensure credit accessibility for key sectors like renewable energy, education, etc.
Relevance:
GS-03 (Economy)
Revised Priority Sector Lending Guidelines:
- Increased Loan Limits in Key Sectors:
- The loan limit for individuals, including vocational courses, has been increased to ₹25 lakh.
- Borrowers can avail up to ₹8 crore for projects such as schools and drinking water facilities.
- A maximum of ₹35 crore can be borrowed for renewable energy projects, including public utilities like street lighting and village electrification. The individual household limit is set at ₹10 lakh.
- Adjustments have been made to housing and agricultural loan limits to align with economic needs.
- Revised PSL Targets for Urban Co-operative Banks (UCBs)
- Total Priority Sector Lending: 60% of Adjusted Net Bank Credit (ANBC).
- Micro Enterprises: 7.5% of ANBC.
- Weaker Sections: 12% of ANBC.
- Expansion of ‘Weaker Sections’ Category
The definition now includes transgenders along with:
- Small and marginal farmers, distressed farmers, artisans, and individual members of Self-Help Groups (SHGs) or Joint Liability Groups (JLGs).
- Scheduled Castes (SCs), Scheduled Tribes (STs), persons with disabilities, and minority communities recognized by the Government of India.
- Individual women beneficiaries (up to ₹2 lakh, except for UCBs).
Prelims Question:
Which of the following sectors are included under the revised Priority Sector Lending (PSL) guidelines of RBI?
- Renewable Energy
- Social Infrastructure
- Education
- Space Technology
Select the correct answer using the codes below:
- A) 1 and 2 only
- B) 1, 2, and 3 only
- C) 2, 3, and 4 only
- D) 1, 2, 3, and 4
(Answer: B) Renewable Energy, Social Infrastructure, and Education are included under PSL, but Space Technology is not.
