RBI Revamps Priority Sector Lending Guidelines

The Reserve Bank of India has issued revised guidelines on Priority Sector Lending to improve credit targeting in priority sectors. Changes involve enhanced loan limits and broadened criteria, effective April 2025. Notably, housing and renewable energy sectors will benefit from increased coverage, with new borrower eligibility criteria.

The Reserve Bank of India (RBI) has announced a comprehensive overhaul of its Priority Sector Lending (PSL) guidelines in a bid to ensure more efficient allocation of bank credit to critical economic segments.

Set to take effect in April 2025, the revised guidelines introduce significant changes including enhanced loan limits and broadened eligibility criteria. These changes mark a strategic effort to better serve sectors deemed essential for economic growth, such as housing and renewable energy.

Noteworthy updates include expanded borrower categories under 'Weaker Sections' and revised PSL targets for urban cooperative banks. The move is expected to bolster lending in agriculture, MSME, education, and social infrastructure, while promoting renewable energy initiatives.

(With inputs from agencies.)