RBI revises priority sector lending guidelines, new rules effective from April 1, 2025

The Reserve Bank on Monday issued revised guidelines on Priority Sector Lending (PSL) to facilitate better targeting of bank credit to the priority sectors of the economy. The new guidelines will come into effect from April 1, 2025, the RBI said.

"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 stated.

The major changes in the new norms include the enhancement of several loan limits, including housing loans for enhanced PSL coverage, and the broadening of the purposes based on which loans may be classified under 'renewable energy.'

There is also a revision of the overall PSL target for urban cooperative banks (UCBs) to 60% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE), whichever is higher. The revised norms also expand the list of eligible borrowers under the category of 'Weaker Sections,' along with the removal of the existing cap on loans by UCBs to individual women beneficiaries.