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Informist, Monday, Mar. 24, 2025

 

MUMBAI – The Reserve Bank of India on Monday issued revised guidelines for priority sector lending which will come into effect on Apr. 1, the central bank said in a release Monday. The guidelines include enhancement of several loan limits, including housing loans for enhanced priority sector lending coverage, the release said. 

 

The RBI also revised the overall priority sector lending target for urban co-operative banks to 60% of adjusted net bank credit or credit equivalent of off-balance sheet exposures, whichever is higher. The central bank broadened the purposes based on which loans may be classified under 'Renewable Energy'.

 

According to the previous guidelines, banks were required to achieve an overall priority sector lending target of 75% of adjusted net bank credit or credit equivalent of off-balance sheet exposures, which has now been revised to just 60%. 

 

Under renewable energy, the RBI allows banks to give loans up to INR 350 million to borrowers for renewable energy-based power generators and for renewable energy based public utilities. For individual households, the loan limit will be INR 1.00 million per borrower.  

 

The limits for bank loans to the housing sector for priority sector have been classified in three categories, INR 5.0 million for centres with a population of 5 million and above, INR 4.50 million for centres with a population of 1 million and above but below 5 million, and INR 3.50 million for centres with a population below 1 million. However, housing loans to banks' own employees, and housing loans which are backed by long-term bonds will not be eligible for classification under the priority sector, the RBI said. 

 

The RBI also expanded the list of eligible borrowers under the category of ‘Weaker Sections', along with removal of 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 RBI said. End

 

Reported by Kabir Sharma

Edited by Akul Nishant Akhoury

 

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