Changes proposed in priority sector lending (psl)-regarding

Since the vision of Priority Sector Lending (PSL) first took shape, the structure of the Indian economy, the contribution by various sectors to GDP and the demographic profile has changed significantly. These emerging realities have also shaped the perception of national priorities. Total credit extended by Banks in Priority sector Lending is Rs.2154356.29 Crore. There is a need to increase employment, create basic infrastructure and improve competitiveness of the economy, thus creating more jobs. It is, therefore, time to re-orient the Priority Sector Lending Guidelines towards today’s growth and inclusion agenda.

The following changes are being proposed in the Priority Sector lending:-

  • To enhance credit to Small and marginal farmers, a separate sub limit of upto 8% (for 1st year – 7% and 2nd year – 8%) is being introduced for the first time.
  • Loans for agri-processing & agri-infrastructure would be included in PSL without any limit on the size of loans.
  • Loans to Medium Enterprises being included in PSL.
  • For the first time a separate sub limit of 7.5% of ANBC is being created for the Micro Enterprises.
  • Loans upto Rs.5 crore for Social infrastructure, like schools and health care facilities, drinking water facilities, sanitation facilities etc. are being included under PSL, for towns of less than 1 lac population.
  • Renewable Energy sector is being added to the PSL, upto Rs.10 crore loans.
  • Introduction of Priority Sector Lending Certificate (PSLCs), which will provide a market-driven incentive for efficiency, will enable banks to sell their surplus lending and thus earning a premium for their efficiency/geographical spread.
  • Progress to be monitored quarterly and not at the end of the year. (Source-PIB)

More Under Finance

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

January 2021