Loans up to Rs 50 cr for start-ups get priority sector tag in new RBI norms

The Reserve Bank of India (RBI) has revised the norms for the Priority Sector Lending (PSL) to support start-ups and the renewable energy sector. Loans up to R 50 crore for start-ups would be treated as PSL exposure for banks.

For health infrastructure, including entities working under the government’s ‘Ayushman Bharat’ scheme, the lending has been doubled to Rs 10 crore. Such loans will be available for building healthcare facilities in Tier II to Tier VI cities. For Urban Cooperatives Banks (UCBs), the above limits are applicable only in centres having a population of less than one lakh.

The loan limit for renewable energy has been doubled to Rs 30 crore. Borrowers of solar-based power generators, biomass-based power generators, wind mills, and micro-hydel plants will get PSL status. Loans for non-conventional energy based public utilities, like street lighting systems and remote village electrification, will be eligible for PSL classification. For individual households, the loan limit will be Rs 10 lakh per borrower, according to RBI’s to revised guidelines.

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The RBI has prescribed higher credit limit for lending to Farmers Producers Organisations (FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.

To address regional disparities in the flow of priority sector credit, higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.

The targets prescribed for “small and marginal farmers” and “weaker sections” will be increased in a phased manner, said the central bank.