Date : Sep 04, 2020

RBI Releases Revised Priority Sector Lending Guidelines

Reserve Bank of India has comprehensively reviewed the Priority Sector Lending (PSL) Guidelines to align it with emerging national priorities and bring sharper focus on inclusive development, after having wide ranging discussions with all stakeholders.

Revised PSL guidelines will enable better credit penetration to credit deficient areas; increase the lending to small and marginal farmers and weaker sections; boost credit to renewable energy, and health infrastructure.

Bank finance to start-ups (up to ₹50 crore); loans to farmers for installation of solar power plants for solarisation of grid connected agriculture pumps and loans for setting up Compressed Bio Gas (CBG) plants have been included as fresh categories eligible for finance under priority sector. Some of the salient features of revised PSL guidelines are:

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

2. The targets prescribed for “small and marginal farmers” and “weaker sections” are being increased in a phased manner.

3. Higher credit limit has been specified for Farmers Producers Organisations (FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price.

4. Loan limits for renewable energy have been increased (doubled).

5. For improvement of health infrastructure, credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled.

(Yogesh Dayal)
Chief General Manager

Press Release No. 2020-2021/284

Source- https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=50310

*********

Reserve Bank of India

RBI/FIDD/2020-21/72
Master Directions FIDD.CO.Plan.BC.5/04.09.01/2020-21

September 04, 2020

The Chairman / Managing Director/
Chief Executive Officer
[All Commercial Banks including Regional Rural Banks,
Small Finance Banks, Local Area Banks and
Primary (Urban) Co-operative Banks other than Salary Earners’ Banks]

Madam/Dear Sir,

Master Directions – Priority Sector Lending (PSL) – Targets and Classification.

The Priority Sector Lending (PSL) guidelines issued by Reserve Bank of India were last reviewed for Commercial Banks in April 2015 and for UCBs in May 2018 respectively. With an objective to harmonise various instructions issued to Commercial Banks, SFBs, RRBs, UCBs and LABs; align these guidelines with emerging national priorities and bring sharper focus on inclusive development, it was decided to comprehensively review the PSL guidelines. The revised guidelines also aim to encourage and support environment friendly lending policies to help achieve Sustainable Development Goals (SDGs). This review also took into account the recommendations made by the ‘Expert Committee on Micro, Small and Medium Enterprises (Chairman: Shri U.K. Sinha) and the ‘Internal Working Group to Review Agriculture Credit’ (Chairman: Shri M. K. Jain) apart from discussions with all stakeholders. Further, these Master Directions encompass the revised guidelines on PSL for all Commercial banks, RRBs, SFBs, UCBs and LABs and, accordingly, supersede the earlier Master Directions on PSL issued separately for Scheduled Commercial Banks, RRBs, SFBs and guidelines issued for UCBs, respectively. The list of circulars consolidated in these Master Directions is indicated in the Appendix. The Master Directions have been placed on the RBI website www.rbi.org.in.

Yours faithfully,

(Gautam Prasad Borah)
Chief General Manager-in-Charge

INDEX

Para No. Particulars
CHAPTER – I: PRELIMINARY
1. Short Title and Commencement
2. Applicability
3. Definitions/ Clarifications
CHAPTER – II: CATEGORIES AND TARGETS UNDER PRIORITY SECTOR
4. Categories under Priority Sector
5. Targets /Sub-targets for Priority Sector
6. Computation of Adjusted Net Bank Credit (ANBC)
7. Adjustments for weights in PSL Achievement
CHAPTER – III: DESCRIPTION OF ELIGIBLE CATEGORIES UNDER PRIORITY SECTOR
8. Agriculture
9. Micro, Small and Medium Enterprises (MSMEs)
10. Export Credit
11. Education
12. Housing
13. Social Infrastructure
14. Renewable Energy
15. Others
16. Weaker Sections
CHAPTER – IV: MISCELLANEOUS
17. Investments by Banks in Securitised Assets
18. Transfer of Assets through Direct Assignment /Outright Purchase
19. Inter Bank Participation Certificates (IBPCs)
20. Priority Sector Lending Certificates (PSLCs)
21. Bank loans to MFIs (NBFC-MFIs, Societies, Trusts, etc.) for On-Lending
22. Bank loans to NBFCs for On-Lending
23. Bank loans to HFCs for On-Lending
24. Limits on On-Lending
25. Co-origination of loans by Banks and NBFCs
26. Monitoring of Priority Sector Lending Targets
27. Non-achievement of Priority Sector Targets
28. Common guidelines for Priority Sector Loans
ANNEX – I A: List of Districts with comparatively high PSL Credit
ANNEX – I B: List of Districts with comparatively low PSL Credit
ANNEX – II: Indicative list of eligible activities under Agriculture Infrastructure and Ancillary activities
ANNEX – III: Indicative list of Permissible Activities under Food Processing Sector as shared by MoFPI
ANNEX – IV: Calculation of Priority Sector Achievement
APPENDIX – List of Circulars Consolidated

Master Directions- Reserve Bank of India (Priority Sector Lending –
Targets and Classification) Directions, 2020

In exercise of the powers conferred by Sections 21 and 35A read with Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

CHAPTER – I
PRELIMINARY

1. Short Title and Commencement

1.1 These Directions shall be called the Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2020.

1.2 These Directions shall come into effect on the day they are placed on the official website of the Reserve Bank of India.

2. Applicability

The provisions of these Directions shall apply to every Commercial Bank [including Regional Rural Bank (RRB), Small Finance Bank (SFB), Local Area Bank] and Primary (Urban) Co-operative Bank (UCB) other than Salary Earners’ Bank licensed to operate in India by the Reserve Bank of India.

3. Definitions/ Clarifications

3.1 In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below:

  1. ‘Urban Co-operative Bank’ or ‘UCB’ means a Primary Co-operative Bank as defined under Section 5(ccv) of the Banking Regulation Act, 1949 read with Section 56 of the Act.
  2. “On-lending” means loans sanctioned by banks to eligible intermediaries for onward lending for creation of priority sector assets. The average maturity of priority sector assets thus created by the eligible intermediaries should be co-terminus with maturity of the bank loan.
  3. Contingent liabilities/off-balance sheet items do not form part of priority sector achievement. However, foreign banks with less than 20 branches have an option to reckon the Credit Equivalent of Off-Balance Sheet Exposures (CEOBE) extended to borrowers for eligible priority sector activities for achievement of priority sector target, subject to the condition that the CEOBE (both priority sector and non-priority sector excluding interbank exposure) should be added to the Adjusted Net Bank Credit (ANBC) in the denominator for computation of PSL targets.
  4. Off-balance sheet interbank exposures are excluded for computing CEOBE for the priority sector targets.
  5. The term “all-inclusive interest” includes interest (effective annual interest), processing fees and service charges.

3.2 All other expressions, unless defined herein, shall have the same meaning as has been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934 or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.

3.3 Banks must ensure that loans extended under priority sector are for approved purposes and the end use is continuously monitored. The banks should put in place proper internal controls and systems in this regard.

CHAPTER – II
CATEGORIES AND TARGETS UNDER PRIORITY SECTOR

4. The categories under priority sector are as follows:

  1. Agriculture
  2. Micro, Small and Medium Enterprises
  3. Export Credit
  4. Education
  5. Housing
  6. Social Infrastructure
  7. Renewable Energy
  8. Others

The details of eligible activities under the above categories are specified in Chapter III.

5. Targets /Sub-targets for Priority sector

5.1 The targets and sub-targets set under priority sector lending, to be computed on the basis of the ANBC/ CEOBE as applicable as on the corresponding date of the preceding year, are as under:

Categories Domestic commercial banks (excl. RRBs & SFBs) & foreign banks with 20 branches and above Foreign banks with less than 20 branches Regional Rural Banks Small Finance Banks
Total Priority Sector 40 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher 40 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher; out of which up to 32% can be in the form of lending to Exports and not less than 8% can be to any other priority sector 75 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher; However, lending to Medium Enterprises, Social Infrastructure and Renewable Energy shall be reckoned for priority sector achievement only up to 15 per cent of ANBC. 75 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher.
Agriculture 18 per cent of ANBC or CEOBE, whichever is higher; out of which a target of 10 percent# is prescribed for Small and Marginal Farmers (SMFs) Not applicable 18 per cent ANBC or CEOBE, whichever is higher; out of which a target of 10 percent# is prescribed for SMFs 18 per cent of ANBC or CEOBE, whichever is higher; out of which a target of 10 percent# is prescribed for SMFs
Micro Enterprises 7.5 per cent of ANBC or CEOBE, whichever is higher Not applicable 7.5 per cent of ANBC or CEOBE, whichever is higher 7.5 per cent of ANBC or CEOBE, whichever is higher
Advances to Weaker Sections 12 percent# of ANBC or CEOBE, whichever is higher Not applicable 15 per cent of ANBC or CEOBE, whichever is higher 12 percent# of ANBC or CEOBE, whichever is higher
# Revised targets for Agriculture and SMFs will be implemented in a phased manner as indicated in para 5.2

5.2 The targets for lending to SMFs and for Weaker Sections shall be revised upwards from FY 2021-22 onwards as follows:

Categories Primary Urban Co-operative Bank
Total Priority Sector 40 per cent of ANBC or CEOBE, whichever is higher, which shall stand increased to 75 per cent of ANBC or CEOBE, whichever is higher, with effect from March 31, 2024. UCBs shall comply with the stipulated target as per the following milestones:

Existing target

March 31, 2021

March 31, 2022

March 31, 2023

March 31, 2024

40% 45% 50% 60% 75%
Micro Enterprises 7.5 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher
Advances to Weaker Sections 12 per cent# of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.
# Revised targets for weaker sections will be implemented in a phased manner as indicated below
Financial Year Small and Marginal Farmers target * Weaker Sections target ^
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
* Not applicable to UCBs
^ Weaker Sections target for RRBs will continue to be 15% of ANBC or CEOBE, whichever is higher.

5.3 All domestic banks (other than UCBs) and foreign banks with more than 20 branches are directed to ensure that the overall lending to Non-Corporate Farmers (NCFs) does not fall below the system-wide average of the last three years’ achievement which will be separately notified every year. The applicable target for lending to the non-corporate farmers for FY 2020-21 will be 12.14% of ANBC or CEOBE whichever is higher. All efforts should be made by banks to reach the level of 13.5 percent of ANBC (erstwhile target for direct lending to agriculture sector).

6. Computation of Adjusted Net Bank Credit (ANBC)

6.1 For the purpose of priority sector lending, ANBC denotes the outstanding Bank Credit in India [As prescribed in item No.VI of Form ‘A’ under Section 42 (2) of the RBI Act, 1934] and computed as follows:

Bank Credit in India [As prescribed in item No.VI of Form `A’ under Section 42(2) of the RBI Act, 1934] I
Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC)* III(I-II)
Outstanding Deposits under RIDF and other eligible funds with NABARD, NHB, SIDBI and MUDRA Ltd in lieu of non-achievement of priority sector lending targets/sub-targets + outstanding PSLCs IV
Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable housing as per circular DBOD.BP.BC. No.25/08.12.014/2014-15 dated July 15, 2014 V
Advances extended in India against the incremental FCNR (B)/NRE deposits, qualifying for exemption from CRR/SLR requirements, as per the Reserve Bank’s circulars DBOD.No.Ret.BC.36/12.01.001/2013-14 dated August 14, 2013 read with DBOD.No.Ret.BC.93/12.01.001/2013-14 dated January 31, 2014, DBOD mailbox clarification issued on February 6, 2014 and UBD.BPD.(PCB).CIR.No.5/13.01.000/2013-14 dated August 27, 2013 read with UBD.BPD.(PCB).Cir.No.72/13.01.000/2013-14 dated June 11, 2014. VI
Investments made by public sector banks in the Recapitalization Bonds floated by Government of India VII
Other investments eligible to be treated as priority sector (e.g. investments in securitised assets) VIII
Face Value of securities acquired and kept under HTM category under the TLTRO 2.0 (Press Release 2019-2020/2237 dated April 17, 2020 read with Q.11 of FAQ and SLF-MF- Press Release 2019-2020/2276 dated April 27, 2020 and also Extended Regulatory Benefits under SLF-MF Scheme vide Press Release 2019-2020/2294 dated April 30, 2020. IX
Bonds/debentures in Non-SLR categories under HTM category X
For UCBs: investments made after August 30, 2007 in permitted non SLR bonds held under ‘Held to Maturity’ (HTM) category XI
ANBC (Other than UCBs) III + IV- (V+VI+VII) +VIII – IX + X
ANBC for UCBs III + IV – VI – IX + XI
* For the purpose of priority sector computation only. Banks should not deduct / net any amount like provisions, accrued interest, etc. from NBC.

6.2 For the purpose of calculation of CEOBE, banks may be guided by the Master Circular on Exposure Norms issued by Department of Regulation, RBI vide DBR.No.Dir.BC.12/13.03.00/ 2015-16 dated July 1, 2015 and as updated from time to time. UCBs may be guided by the relevant provisions of the Master Circular dated July 1, 2015 on ‘Prudential Norms on Capital Adequacy – UCBs’ issued by Reserve Bank of India.

6.3 SFBs may be further guided by Para 6.5 (ii to vii) of the Operating Guidelines for Small Finance Banks issued by Department of Regulation (RBI/2016-17/81 DBR.NBD. No.26/16.13.218/2016-17 dated October 06, 2016), pertaining to treatment of grandfathered loans, for computation of ANBC.

6.4 While calculating Net Bank Credit as above, if banks subtract prudential write off at Corporate/Head Office level, it must be ensured that the credit to priority sector and all other sub-sectors so written off should also be subtracted category wise from priority sector and sub-target achievement. Wherever, investments or any other items which are treated as eligible for classification under priority sector target/sub-target achievement, the same should also form part of Adjusted Net Bank Credit.

6.5 All the banks have to adhere to the respective licencing guidelines and operating guidelines issued by the Department of Regulation, RBI and updated from time to time

7. Adjustments for weights in PSL Achievement

To address regional disparities in the flow of priority sector credit at the district level, it has been decided to rank districts on the basis of per capita credit flow to priority sector and build an incentive framework for districts with comparatively lower flow of credit and a dis-incentive framework for districts with comparatively higher flow of priority sector credit. Accordingly, from FY 2021-22 onwards, a higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than ₹6000), and a lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than ₹25,000). The list of both categories of districts is given in Annex IA & IB. This list will be valid for a period up to FY 2023-24 and will be reviewed thereafter. The districts other than those mentioned in Annex IA and IB will continue to have existing weightage of 100%.

The banks should continue to report the actual outstanding amount in QPSA returns as hitherto. Adjustments for weights to incremental PSL credit will be done by RBI, based on reporting of district wise credit flow to FIDD, CO through the ADEPT database. RRBs, UCBs, LABs and foreign banks (including WoS) would be exempted from adjustments of weights in PSL achievement due to their currently limited area of operation/catering to a niche segment.

CHAPTER – III
DESCRIPTION OF ELIGIBLE CATEGORIES UNDER PRIORITY SECTOR

8. Agriculture

The lending to agriculture sector will include Farm Credit (Agriculture and Allied Activities), lending for Agriculture Infrastructure and Ancillary Activities.

8.1 Farm Credit – Individual farmers

Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs) i.e. groups of individual farmers, provided banks maintain disaggregated data of such loans] and Proprietorship firms of farmers, directly engaged in Agriculture and Allied Activities, viz. dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will include:

  1. Crop loans including loans for traditional/non-traditional plantations, horticulture and allied activities.
  2. Medium and long-term loans for agriculture and allied activities (e.g. purchase of agricultural implements and machinery and developmental loans for allied activities).
  3. Loans for pre and post-harvest activities viz. spraying, harvesting, grading and transporting of their own farm produce.
  4. Loans to distressed farmers indebted to non-institutional lenders.
  5. Loans under the Kisan Credit Card Scheme.
  6. Loans to small and marginal farmers for purchase of land for agricultural purposes.
  7. Loans against pledge/hypothecation of agricultural produce (including warehouse receipt1) for a period not exceeding 12 months subject to a limit up to ₹50 lakh.
  8. Loans to farmers for installation of stand-alone Solar Agriculture Pumps and for solarisation of grid connected Agriculture Pumps.
  9. Loans to farmers for installation of solar power plants on barren/fallow land or in stilt fashion on agriculture land owned by farmer.

8.2 Farm Credit – Corporate farmers, Farmer Producer Organisations (FPOs)/(FPC) Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities

(a) Loans for the following activities will be subject to an aggregate limit of ₹2 crore per borrowing entity:

  1. Crop loans to farmers which will include traditional/non-traditional plantations and horticulture and loans for allied activities.
  2. Medium and long-term loans for agriculture and allied activities (e.g. purchase of agricultural implements and machinery and developmental loans for allied activities).
  3. Loans for pre and post-harvest activities viz. spraying, harvesting, grading and transporting of their own farm produce.

(b) Loans up to ₹50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts2) for a period not exceeding 12 months.

(c) Loans up to ₹5 crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of their produce at a pre-determined price.

(d) UCBs are not permitted to lend to co-operatives of farmers.

8.3 Agriculture Infrastructure

Loans for agriculture infrastructure will be subject to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system. List of activities is furnished in Annex II.

8.4 Ancillary Services

8.4.1 Following loans under ancillary services will be subject to limits prescribed as under:

  1. Loans up to ₹5 crore to co-operative societies of farmers for purchase of the produce of members (Not applicable to UCBs)
  2. Loans up to ₹50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in agriculture and allied services.
  3. Loans for Food and Agro-processing up to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system.

8.4.2 Outstanding deposits under RIDF and other eligible funds with NABARD on account of priority sector shortfall.

8.4.3 The eligible activities under ancillary services and food and agro-processing is given in Annex II and Annex III, respectively.

8.5 Small and Marginal Farmers (SMFs)

For the purpose of computation of achievement of the sub-target, Small and Marginal Farmers will include the following:

  1. Farmers with landholding of up to 1 hectare (Marginal Farmers).
  2. Farmers with a landholding of more than 1 hectare and up to 2 hectares (Small Farmers).
  3. Landless agricultural labourers, tenant farmers, oral lessees and share-croppers whose share of landholding is within the limits prescribed for SMFs.
  4. Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual SMFs directly engaged in Agriculture and Allied Activities, provided banks maintain disaggregated data of such loans.
  5. Loans up to ₹2 lakh to individuals solely engaged in Allied activities without any accompanying land holding criteria.
  6. Loans to FPOs/FPC of individual farmers and co-operatives of farmers directly engaged in Agriculture and Allied Activities where the land-holding share of SMFs is not less than 75 per cent, subject to loan limits prescribed in para 8.2. UCBs are not permitted to lend to co-operatives of farmers.

8.6 Lending by banks to NBFCs and MFIs for on-lending in agriculture

  1. Bank credit extended to registered NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised SRO for the sector, for on-lending to individuals and also to members of SHGs / JLGs will be eligible for categorisation as priority sector advance under respective categories of agriculture subject to conditions specified in para 21 (not applicable to RRBs, UCBs, SFBs and LABs).
  2. Bank credit to registered NBFCs (other than MFIs) towards on-lending for ‘Term lending’ component under agriculture will be allowed up to ₹ 10 lakh per borrower subject to conditions specified in para 22 and 24 (not applicable to RRBs, UCBs, SFBs and LABs).

9. Micro, Small and Medium Enterprises (MSMEs)

The definition of MSMEs will be as per Government of India (GoI), Gazette Notification S.O. 2119 (E) dated June 26, 2020 read with circular RBI/2020-2021/10 FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 read with FIDD.MSME & NFS. BC. No.4/06.02.31/2020-21 dated July 2, 2020, August 21, 2020 respectively on ‘Credit flow to Micro, Small and Medium Enterprises Sector’ and updated from time to time. Further, such MSMEs should be engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services. All bank loans to MSMEs conforming to the above guidelines qualify for classification under priority sector lending.

9.1 Factoring Transactions (not applicable to RRBs and UCBs)

  1. ‘With Recourse’ Factoring transactions by banks which carry out the business of factoring departmentally wherever the ‘assignor’ is a Micro, Small or Medium Enterprise would be eligible for classification under MSME category on the reporting dates.
  2. In terms of paragraph 9 of Circular DBR.No.FSD.BC.32/24.01.007/2015-16 dated July 30, 2015 on ‘Provision of Factoring Services by Banks- Review’, inter-alia, the borrower’s bank shall obtain from the borrower, periodical certificates regarding factored receivables to avoid double financing/ counting. Further, the ‘factors’ must intimate the limits sanctioned to the borrower and details of debts factored to the banks concerned, taking responsibility to avoid double financing.
  3. Factoring transactions pertaining to MSMEs taking place through the Trade Receivables Discounting System (TReDS) shall also be eligible for classification under priority sector.

9.2 Khadi and Village Industries Sector (KVI)

All loans to units in the KVI sector will be eligible for classification under the sub-target of 7.5 percent prescribed for Micro Enterprises under priority sector.

9.3 Other Finance to MSMEs

  1. Loans up to ₹50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that confirm to the definition of MSME as per Para 9.
  2. Loans to entities involved in assisting the decentralized sector in the supply of inputs and marketing of output of artisans, village and cottage industries. In respect of UCBs, the term “entities” shall not include institutions to which UCBs are not permitted to lend under the RBI guidelines / the legal framework governing their functioning.
  3. Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries (Not applicable for UCBs).
  4. Loans sanctioned by banks to NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised SRO for the sector for on-lending to MSME sector as per the conditions specified in paragraph 21 of these Master Directions (not applicable to RRBs, SFBs and UCBs)
  5. Loans to registered NBFCs (other than MFIs) for on-lending to Micro & Small Enterprises as per conditions specified in para 22 of these Master Directions (not applicable to RRBs, SFBs and UCBs)
  6. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit Card and Weaver’s Card etc. in existence and catering to the non-farm entrepreneurial credit needs of individuals).
  7. Overdraft to Pradhan Mantri Jan-Dhan Yojana (PMJDY) account holders as per limits and conditions prescribed by Department of Financial Services, Ministry of Finance from time to time, will qualify as achievement of the target for lending to Micro Enterprises.
  8. Outstanding deposits with SIDBI and MUDRA Ltd. on account of priority sector shortfall.

10. Export Credit (not applicable to RRBs and LABs)

Export credit under agriculture and MSME sectors are allowed to be classified as PSL in the respective categories viz. agriculture and MSME. Export Credit (other than in agriculture and MSME) will be allowed to be classified as priority sector as per the following table:

Domestic banks / WoS of Foreign banks/ SFBs/ UCBs Foreign banks with 20 branches and above Foreign banks with less than 20 branches
Incremental export credit over corresponding date of the preceding year, up to 2 per cent of ANBC or CEOBE whichever is higher, subject to a sanctioned limit of up to ₹ 40 crore per borrower. Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or CEOBE whichever is higher. Export credit up to 32 per cent of ANBC or CEOBE whichever is higher.

10.1 Export credit includes pre-shipment and post-shipment export credit (excluding off-balance sheet items) as defined in Master Circular on Rupee / Foreign Currency Export Credit and Customer Service to Exporters issued by Department of Regulation, RBI vide DBR No.DIR.BC.14/04.02.002/2015-16 dated July 1, 2015 and updated from time to time.

11. Education

Loans to individuals for educational purposes, including vocational courses, not exceeding ₹ 20 lakh will be considered as eligible for priority sector classification. Loans currently classified as priority sector will continue till maturity.

12. Housing

12.1 Bank loans to Housing sector as per limits prescribed below are eligible for priority sector classification:

  1. Loans to individuals up to ₹35 lakh in metropolitan centres (with population of ten lakh and above) and up to ₹25 lakh in other centres for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed ₹45 lakh and ₹30 lakh respectively. Existing individual housing loans of UCBs presently classified under PSL will continue as PSL till maturity or repayment.
  2. Housing loans to banks’ own employees will not be eligible for classification under the priority sector.
  3. Since Housing loans which are backed by long term bonds are exempted from ANBC, banks should not classify such loans under priority sector. Investments made by UCBs in bonds issued by NHB / HUDCO on or after April 1, 2007 shall not be eligible for classification under priority sector.

12.2 Loans up to ₹10 lakh in metropolitan centres and up to ₹6 lakh in other centres for repairs to damaged dwelling units conforming to the overall cost of the dwelling unit as prescribed in para 12.1.

12.3 Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to dwelling units with carpet area of not more than 60 sq.m.

12.4 Bank loans for affordable housing projects using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 sq.m.

12.5 Bank loans to HFCs (approved by NHB for their refinance) for on-lending, up to ₹20 lakh for individual borrowers, for purchase/construction/ reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to conditions specified in para 23 and 24.

12.6 Outstanding deposits with NHB on account of priority sector shortfall.

13. Social Infrastructure

Bank loans to social infrastructure sector as per limits prescribed below are eligible for priority sector classification

13.1. Bank loans up to a limit of ₹5 crore per borrower for setting up schools, drinking water facilities and sanitation facilities including construction/ refurbishment of household toilets and water improvements at household level, etc. and loans up to a limit of ₹10 crore per borrower for building health care facilities including under ‘Ayushman Bharat’ in Tier II to Tier VI centres. In case of UCBs, the above limits are applicable only in centres having a population of less than one lakh.

13.2. # Bank loans to MFIs extended for on-lending to individuals and also to members of SHGs/JLGs for water and sanitation facilities subject to the criteria laid down in paragraph 21 of these Master Directions.

# not applicable to RRBs, UCBs and SFBs.

14. Renewable Energy

Bank loans up to a limit of ₹30 crore to borrowers for purposes like solar based power generators, biomass-based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities, viz., street lighting systems and remote village electrification etc., will be eligible for Priority Sector classification. For individual households, the loan limit will be ₹10 lakh per borrower.

15. Others

The following loans as per the prescribed limits are eligible for priority sector classification:

15.1. Loans not exceeding ₹1.00 lakh per borrower provided directly by banks to individuals and individual members of SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed ₹1.00 lakh and for non-rural areas it does not exceed ₹1.60 lakh, and loans not exceeding ₹2.00 lakh provided directly by banks to SHG/JLG for activities other than agriculture or MSME, viz., loans for meeting social needs, construction or repair of house, construction of toilets or any viable common activity started by the SHGs.

15.2. Loans to distressed persons [other than distressed farmers indebted to non-institutional lenders] not exceeding ₹1.00 lakh per borrower to prepay their debt to non-institutional lenders.

15.3. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations.

15.4. Loans up to ₹50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in activities other than Agriculture or MSME.

16. Weaker Sections

16.1 Priority sector loans to the following borrowers will be considered as lending under Weaker Sections category:

(i) Small and Marginal Farmers
(ii) Artisans, village and cottage industries where individual credit limits do not exceed ₹1 lakh
(iii) Beneficiaries under Government Sponsored Schemes such as National Rural Livelihood Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)
(iv) Scheduled Castes and Scheduled Tribes
(v) Beneficiaries of Differential Rate of Interest (DRI) scheme
(vi) Self Help Groups
(vii) Distressed farmers indebted to non-institutional lenders
(viii) Distressed persons other than farmers, with loan amount not exceeding ₹1 lakh per borrower to prepay their debt to non-institutional lenders
(ix) Individual women beneficiaries up to ₹1 lakh per borrower (For UCBs, existing loans to women will continue to be classified under weaker sections till their maturity/repayment.)
(x) Persons with disabilities
(xi) Minority communities as may be notified by Government of India from time to time.

16.2 Overdraft availed by PMJDY account holders as per limits and conditions prescribed by Department of Financial Services, Ministry of Finance from time to time may be classified under Weaker Sections.

16.3 In States, where one of the minority communities notified is, in fact, in majority, item (xi) will cover only the other notified minorities. These States/ Union Territories are Punjab, Meghalaya, Mizoram, Nagaland, Lakshadweep and Jammu & Kashmir.

CHAPTER IV
MISCELLANEOUS

17. Investments by banks in securitised assets (not applicable to RRBs and UCBs)

Investments by banks in ‘securitised assets’, representing loans to various categories of priority sector, except ‘others’ category, are eligible for classification under respective categories of priority sector depending on the underlying assets provided:

  1. The assets are originated by banks and financial institutions and are eligible to be classified as priority sector advances prior to securitisation and fulfil the Reserve Bank of India guidelines on securitisation issued vide circular DBOD.No.BP.BC-103/21.04.177/2011-12 dated May 7, 2012 and updated from time to time.
  2. The all-inclusive interest charged to the ultimate borrower by the originating entity should not exceed the External Benchmark Lending Rate (EBLR)/ MCLR of the investing bank plus appropriate spread which will be communicated separately.
  3. The investments in securitised assets originated by MFIs, which comply with the guidelines in Paragraph 21 of these Master Directions are exempted from this interest cap as there are separate caps on margin and interest rate for MFIs.
  4. Purchase/ assignment/investment transactions undertaken by banks with NBFCs, where the underlying assets are loans against gold jewellery, are not eligible for priority sector status.

18. Transfer of Assets through Direct Assignment /Outright purchase (not applicable to RRBs and UCBs)

Assignment/outright purchase of pool of assets by banks representing loans under various categories of priority sector, except the ‘others’ category, will be eligible for classification under respective categories of priority sector provided:

  1. The assets are originated by banks and financial institutions which are eligible to be classified as priority sector advances prior to the purchase and fulfil the Reserve Bank of India guidelines on outright purchase/assignment issued vide circular DBOD.No.BP.BC-103/21.04.177/2011-12 dated May 7, 2012 and updated from time to time.
  2. The all-inclusive interest charged to the ultimate borrower by the originating entity should not exceed the External Benchmark Lending Rate (EBLR)/ MCLR of the purchasing bank plus appropriate spread as communicated separately.
  3. The Assignments/Outright purchases of eligible priority sector loans from MFIs, which comply with the guidelines in Paragraph 21 of these Master Directions are exempted from this interest rate cap as there are separate caps on margin and interest rate for MFIs.
  4. When the bank undertakes outright purchase of loan assets (eligible to be classified under priority sector) from banks/ financial institutions, they must report the outstanding amount actually disbursed to priority sector borrowers and not the premium embedded amount paid to the seller.
  5. Purchase/ assignment/ investment transactions undertaken by banks with NBFCs, where the underlying assets are loans against gold jewellery, are not eligible for priority sector status.

19. Inter Bank Participation Certificates (IBPCs) (not applicable to UCBs)

  1. IBPCs bought by banks, on a risk sharing basis, are eligible for classification under respective categories of priority sector, provided the underlying assets are eligible to be categorized under the respective categories of priority sector and the banks fulfil the Reserve Bank of India guidelines on IBPCs issued vide circular DBOD.No.BP.BC.57/62-88 dated December 31, 1988 and updated from time to time.
  2. IBPCs bought by banks on risk sharing basis relating to ‘Export Credit’ as per Para 10, may be classified from purchasing bank’s perspective for priority sector categorization. However, in such a scenario, the issuing bank shall certify that the underlying asset is ‘Export Credit’, in addition to the due diligence required to be undertaken by the issuing and the purchasing bank as per guidelines in this regard.
  3. RRBs are allowed to issue Inter Bank Participation Certificates (IBPCs) to Scheduled Commercial Banks in respect of their priority sector advances in excess of 75 per cent of their outstanding advances. RRBs have to adhere to guidelines on IBPC vide circular RBI/2009-10/113 RPCD.CO.RRB.BC.No.13/03.05.33/2009-10 dated August 4, 2009 and updated from time to time.

20. Priority Sector Lending Certificates (PSLCs)

The outstanding PSLCs bought by banks will be eligible for classification under respective categories of priority sector provided the underlying assets originated by banks are eligible to be classified as priority sector advances and fulfil the Reserve Bank of India guidelines on Priority Sector Lending Certificates issued vide Circular FIDD.CO.Plan.BC.23/04.09.001/2015-16 dated April 7, 2016. SFBs may further be guided by the terms and conditions specified in Para 1.9 of DBR circular No. DBR.NBD.26/16.13.218/2016-17 dated October 6, 2016 on credit risk transfer and portfolio sales/purchases.

21. Bank loans to MFIs (NBFC-MFIs, Societies, Trusts, etc.) for on-lending (not applicable to RRBs, UCBs, SFBs and LABs)

Bank credit extended to registered NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised SRO for the sector, for on-lending to individuals and also to members of SHGs / JLGs will be eligible for categorisation as priority sector advance under respective categories viz., Agriculture, MSME, Social Infrastructure and Others, provided the MFIs adhere to the conditions prescribed in Chapter II (xx) and Chapter VIII of Master Directions DNBR PD.007 and Chapter II (xx) and Chapter IX of Master Directions DNBR PD.008/03.10.119/2016-17 dated September 1, 2016 and as updated from time to time.

22. Bank loans to NBFCs for on-lending (not applicable to RRBs, UCBs, SFBs and LABs)

Bank credit to registered NBFCs (other than MFIs) for on-lending will be eligible for classification as priority sector under respective categories subject to the following conditions:

  1. Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will be allowed up to ₹ 10 lakh per borrower.
  2. Micro & Small enterprises: On-lending by NBFC will be allowed up to ₹ 20 lakh per borrower.

The above dispensation shall be valid upto March 31, 2021 and will be reviewed thereafter. However, loans disbursed under the on-lending model will continue to be classified under Priority Sector till the date of repayment/maturity.

23. Bank loans to HFCs for on-lending (not applicable to RRBs, SFBs and LABs)

Bank credit to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/construction/ reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of ₹20 lakh per borrower. Banks should maintain necessary borrower-wise details of the underlying portfolio.

24. Cap on On-lending

Bank credit to NBFCs (including HFCs) for on-lending as applicable in para 22 and 23 above, will be allowed up to an overall limit of five percent of individual bank’s total priority sector lending. Banks shall compute the eligible portfolio under on-lending mechanism by averaging across four quarters, to determine adherence to the prescribed cap.

25. Co-origination of loans by Banks and NBFCs for lending to priority sector (not applicable to RRBs, UCBs, SFBs and LABs)

All commercial banks may engage with NBFCs-ND-SI (hereinafter referred to as NBFC) to co-originate loans for the creation of priority sector assets. The arrangement should entail joint contribution of credit at the facility level, by both lenders. It should also involve sharing of risks and rewards between the bank and the NBFC for ensuring appropriate alignment of respective business objectives, as per the mutually decided agreement between the bank and the NBFC. Detailed guidelines, in this regard, have been issued vide our circular No. FIDD.CO.Plan.BC/08/04.09.01/2018-19 dated September 21, 2018.

26. Monitoring of Priority Sector Lending targets

To ensure continuous flow of credit to priority sector, the compliance of banks will be monitored on ‘quarterly’ basis. The data on priority sector advances is required to be furnished by banks to FIDD, Central Office at quarterly and annual intervals as per the reporting format (quarterly and annual). In respect of RRBs, the data on priority sector advances, in the above format, must be furnished to NABARD at quarterly and annual intervals. In respect of UCBs, the data on priority sector advances in the reporting formats ‘Statement I’ and ‘Statement II (Part A to D)’ shall be furnished at quarterly and annual intervals, to the Regional Office of DoS, RBI.

27. Non-achievement of Priority Sector targets

  1. Banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD and other funds with NABARD/NHB/SIDBI/ MUDRA Ltd., as decided by the Reserve Bank from time to time.
  2. With effect from March 31, 2021, all UCBs (excluding those under all-inclusive directions) will be required to contribute to Rural Infrastructure Development Fund (RIDF) established with NABARD and other funds with NABARD / NHB / SIDBI / MUDRA Ltd., against their priority sector lending (PSL) shortfall vis-à-vis the prescribed target.
  3. While computing priority sector target achievement, shortfall / excess lending for each quarter will be monitored separately. A simple average of all quarters will be arrived at and considered for computation of overall shortfall / excess at the end of the year. The same method will be followed for calculating the achievement of priority sector sub-targets. (Illustration given in Annex IV).
  4. The interest rates on banks’ contribution to RIDF or any other funds, tenure of deposits, etc. shall be fixed by Reserve Bank of India from time to time.
  5. The mis-classifications reported by the Reserve Bank’s Department of Supervision (DoS) (NABARD in respect of RRBs) would be adjusted/ reduced from the achievement of that year, to which the amount of misclassification pertains, for allocation to various funds in subsequent years.
  6. Non-achievement of priority sector targets and sub-targets will be taken into account while granting regulatory clearances/approvals for various purposes.

28. Common guidelines for priority sector loans

Banks should comply with the following common guidelines for all categories of advances under the priority sector.

  1. Rate of interest: The rates of interest on bank loans will be as per directives issued by Department of Regulation (DoR), RBI from time to time.
  2. Service charges: No loan related and ad hoc service charges/inspection charges should be levied on priority sector loans up to ₹25,000. In the case of eligible priority sector loans to SHGs/ JLGs, this limit will be applicable per member and not to the group as a whole.
  3. Receipt, Sanction/Rejection/Disbursement Register: A register/ electronic record should be maintained by the bank wherein the date of receipt, sanction/rejection/disbursement with reasons thereof, etc. should be recorded. The register/electronic record should be made available to all inspecting agencies.
  4. Issue of acknowledgement of loan applications: Banks should provide acknowledgement for loan applications received under priority sector loans. Bank Boards should prescribe a time limit within which the bank communicates its decision in writing to the applicants.

ANNEX – I A

List of Districts with comparatively high PSL credit

Sl.No State District name
1 Andaman Nicobar South Andaman
2 Andhra Pradesh Anantapur
3 Andhra Pradesh Chittoor
4 Andhra Pradesh East Godavari
5 Andhra Pradesh Guntur
6 Andhra Pradesh Krishna
7 Andhra Pradesh Kurnool
8 Andhra Pradesh Prakasam
9 Andhra Pradesh Sri Potti Sriramulu Nellore
10 Andhra Pradesh Visakhapatnam
11 Andhra Pradesh West Godavari
12 Andhra Pradesh Y.S.R.
13 Arunachal Pradesh Papumpare
14 Assam Kamrup Metropolitan
15 Bihar Sheikhpura
16 Chandigarh Chandigarh
17 Chhattisgarh Durg
18 Chhattisgarh Raipur
19 Dadra Nagar Haveli Dadra&Nagar Haveli
20 Daman Diu Daman
21 Delhi Central Delhi
22 Delhi East Delhi
23 Delhi New Delhi
24 Delhi North Delhi
25 Delhi Shahdara
26 Delhi South Delhi
27 Delhi South-East Delhi
28 Delhi South-West Delhi
29 Delhi West Delhi
30 Goa North Goa
31 Goa South Goa
32 Gujarat Ahmedabad
33 Gujarat Bharuch
34 Gujarat Gandhinagar
35 Gujarat Junagadh
36 Gujarat Kachchh
37 Gujarat Mahesana
38 Gujarat Morbi
39 Gujarat Porbandar
40 Gujarat Rajkot
41 Gujarat Surat
42 Gujarat Vadodara
43 Gujarat Valsad
44 Haryana Ambala
45 Haryana Bhiwani
46 Haryana Faridabad
47 Haryana Fatehabad
48 Haryana Gurgaon
49 Haryana Hisar
50 Haryana Jind
51 Haryana Kaithal
52 Haryana Karnal
53 Haryana Kurukshetra
54 Haryana Panchkula
55 Haryana Panipat
56 Haryana Rohtak
57 Haryana Sirsa
58 Haryana Sonipat
59 Haryana Yamunanagar
60 Himachal Pradesh Kinnaur
61 Himachal Pradesh Kulu
62 Himachal Pradesh Shimla
63 Himachal Pradesh Sirmaur
64 Himachal Pradesh Solan
65 Jammu Kashmir Baramulla
66 Jammu Kashmir Jammu
67 Jammu Kashmir Pulwama
68 Jammu Kashmir Samba
69 Jammu Kashmir Shopian
70 Jammu Kashmir Srinagar
71 Jharkhand Ranchi
72 Karnataka Bagalkote
73 Karnataka Bangalore Rural
74 Karnataka Bangalore Urban
75 Karnataka Chikmagalur
76 Karnataka Dakshin Kannad
77 Karnataka Davangere
78 Karnataka Dharwad
79 Karnataka Hassan
80 Karnataka Kodagu
81 Karnataka Mysore
82 Karnataka Raichur
83 Karnataka Ramanagara
84 Karnataka Shimoga
85 Karnataka Udipi
86 Kerala Alapuzha
87 Kerala Ernakulam
88 Kerala Idukki
89 Kerala Kannur
90 Kerala Kasaragod
91 Kerala Kollam
92 Kerala Kottayam
93 Kerala Kozhikode
94 Kerala Palakkad
95 Kerala Pathanamthitta
96 Kerala Thiruvananthapuram
97 Kerala Thrissur
98 Kerala Wayanad
99 Ladakh Kargil
100 Ladakh Leh Ladakh
101 Madhya Pradesh Bhopal
102 Madhya Pradesh Gwalior
103 Madhya Pradesh Harda
104 Madhya Pradesh Hoshangabad
105 Madhya Pradesh Indore
106 Madhya Pradesh Jabalpur
107 Madhya Pradesh Narsimhapur
108 Madhya Pradesh Ratlam
109 Madhya Pradesh Sehore
110 Madhya Pradesh Shajapur
111 Madhya Pradesh Ujjain
112 Maharashtra Aurangabad
113 Maharashtra Mumbai
114 Maharashtra Mumbai Suburban
115 Maharashtra Nagpur
116 Maharashtra Nasik
117 Maharashtra Pune
118 Odisha Khurda
119 Puducherry Karaikal
120 Puducherry Mahe
121 Puducherry Puducherry
122 Puducherry Yanam
123 Punjab Amritsar
124 Punjab Barnala
125 Punjab Bathinda
126 Punjab Faridkot
127 Punjab Fatehgarh Sahib
128 Punjab Fazilka
129 Punjab Ferozpur
130 Punjab Hoshiarpur
131 Punjab Jalandhar
132 Punjab Kapurthala
133 Punjab Ludhiana
134 Punjab Mansa
135 Punjab Moga
136 Punjab Muktsar
137 Punjab Patiala
138 Punjab Sahibzada Ajit Singh Nagar
139 Punjab Sangrur
140 Punjab Shahid Bhagat Singh Nagar
141 Punjab Tarn Taran
142 Rajasthan Ajmer
143 Rajasthan Bhilwara
144 Rajasthan Bikaner
145 Rajasthan Ganganagar
146 Rajasthan Hanumangarh
147 Rajasthan Jaipur
148 Rajasthan Jaisalmer
149 Rajasthan Jodhpur
150 Rajasthan Kota
151 Sikkim East Sikkim
152 Tamil Nadu Ariyalur
153 Tamil Nadu Chennai
154 Tamil Nadu Coimbatore
155 Tamil Nadu Cuddalore
156 Tamil Nadu Dharmapuri
157 Tamil Nadu Dindigul
158 Tamil Nadu Erode
159 Tamil Nadu Kancheepuram
160 Tamil Nadu Kanyakumari
161 Tamil Nadu Karur
162 Tamil Nadu Krishnagiri
163 Tamil Nadu Madurai
164 Tamil Nadu Nagapattinam
165 Tamil Nadu Namakkal
166 Tamil Nadu Nilgiris
167 Tamil Nadu Perambalur
168 Tamil Nadu Pudukkottai
169 Tamil Nadu Ramanathapuram
170 Tamil Nadu Salem
171 Tamil Nadu Sivaganga
172 Tamil Nadu Thanjavur
173 Tamil Nadu Theni
174 Tamil Nadu Thiruvallur
175 Tamil Nadu Thiruvarur
176 Tamil Nadu Tiruchirapalli
177 Tamil Nadu Tirunelvali
178 Tamil Nadu Tiruppur
179 Tamil Nadu Tiruvannamalai
180 Tamil Nadu Toothukudi
181 Tamil Nadu Vellore
182 Tamil Nadu Villupuram
183 Tamil Nadu Virudhunagar
184 Telangana Hyderabad
185 Telangana Karimnagar
186 Telangana Khammam
187 Telangana Mahbubnagar
188 Telangana Medchal-Malkajgiri
189 Telangana Nalgonda
190 Telangana Nizamabad
191 Telangana Suryapet
192 Telangana Warangal Urban
193 Uttar Pradesh Agra
194 Uttar Pradesh Gautam Buddha Nagar
195 Uttar Pradesh Ghaziabad
196 Uttar Pradesh Kanpur Nagar
197 Uttar Pradesh Lucknow
198 Uttar Pradesh Meerut
199 Uttarakhand Dehra Dun
200 Uttarakhand Haridwar
201 Uttarakhand Nainital
202 Uttarakhand Udham Singh Nagar
203 West Bengal Darjiling
204 West Bengal Kolkata
205 West Bengal Paschim Bardhaman

ANNEX – I B

List of Districts with comparatively low PSL credit

Sl.No State District name
1 Andaman Nicobar Nicobar
2 Arunachal Pradesh Anjaw
3 Arunachal Pradesh Chunglang
4 Arunachal Pradesh Dibang Valley
5 Arunachal Pradesh East Kameng
6 Arunachal Pradesh East Siang
7 Arunachal Pradesh Kra Daadi
8 Arunachal Pradesh Kurung Kumey
9 Arunachal Pradesh Lohit
10 Arunachal Pradesh Longding
11 Arunachal Pradesh Lower Dibang Valley
12 Arunachal Pradesh Lower Siang
13 Arunachal Pradesh Lower Subansiri
14 Arunachal Pradesh Namsai
15 Arunachal Pradesh Siang
16 Arunachal Pradesh Tawang
17 Arunachal Pradesh Tirap
18 Arunachal Pradesh Upper Siang
19 Arunachal Pradesh Upper Subansiri
20 Arunachal Pradesh West Kameng
21 Arunachal Pradesh West Siang
22 Assam Baksa
23 Assam Charaideo
24 Assam Chirang
25 Assam Dhemaji
26 Assam Dhubri
27 Assam Goalpara
28 Assam Hailakandi
29 Assam Hojai
30 Assam Karbi Anglong
31 Assam Kokrajhar
32 Assam North Cachar Hills
33 Assam South Salmara-Mankachar
34 Assam Udalguri
35 Assam West Karbi Anglong
36 Bihar Araria
37 Bihar Arwal
38 Bihar Aurangabad
39 Bihar Banka
40 Bihar Bhojpur
41 Bihar Darbhanga
42 Bihar Gaya
43 Bihar Gopalganj
44 Bihar Jamui
45 Bihar Jehanabad
46 Bihar Katihar
47 Bihar Khagaria
48 Bihar Lakhisarai
49 Bihar Madhepura
50 Bihar Madhubani
51 Bihar Munger
52 Bihar Nalanda
53 Bihar Nawada
54 Bihar Paschimi Champaran
55 Bihar Purbi Champaran
56 Bihar Saharsa
57 Bihar Samastipur
58 Bihar Saran
59 Bihar Sheohar
60 Bihar Sitamarhi
61 Bihar Siwan
62 Bihar Supaul
63 Bihar Vaishali
64 Chhattisgarh Balod
65 Chhattisgarh Balrampur
66 Chhattisgarh Bastar
67 Chhattisgarh Bemetara
68 Chhattisgarh Bijapur
69 Chhattisgarh Dakshin Bastar Dantewada
70 Chhattisgarh Gariyaband
71 Chhattisgarh Jashpur
72 Chhattisgarh Kondagaon
73 Chhattisgarh Mungeli
74 Chhattisgarh Narayanpur
75 Chhattisgarh Sukma
76 Chhattisgarh Surajpur
77 Chhattisgarh Surguja
78 Chhattisgarh Uttar Bastar Kanker
79 Delhi North-East Delhi
80 Gujarat Dangs
81 Gujarat Dohad
82 Haryana Mewat
83 Jharkhand Chatra
84 Jharkhand Dumka
85 Jharkhand Garhwa
86 Jharkhand Giridih
87 Jharkhand Gumla
88 Jharkhand Jamtara
89 Jharkhand Khunti
90 Jharkhand Latehar
91 Jharkhand Pakur
92 Jharkhand Palamau
93 Jharkhand Sahebganj
94 Jharkhand Simdega
95 Madhya Pradesh Alirajpur
96 Madhya Pradesh Anuppur
97 Madhya Pradesh Bhind
98 Madhya Pradesh Dindori
99 Madhya Pradesh Mandla
100 Madhya Pradesh Niwari
101 Madhya Pradesh Panna
102 Madhya Pradesh Sidhi
103 Madhya Pradesh Singrauli
104 Madhya Pradesh Tikamgarh
105 Madhya Pradesh Umaria
106 Maharashtra Gadchiroli
107 Manipur Bishenpur
108 Manipur Chandel
109 Manipur Churachandpur
110 Manipur Imphal East
111 Manipur Kakching
112 Manipur Kamjong
113 Manipur Kangpokpi
114 Manipur Noney
115 Manipur Pherzawal
116 Manipur Senapati
117 Manipur Tamenglong
118 Manipur Tengnoupal
119 Manipur Thoubal
120 Manipur Ukhrul
121 Meghalaya East Garo Hills
122 Meghalaya East Jaintia Hills
123 Meghalaya Jaintia Hills
124 Meghalaya North Garo Hills
125 Meghalaya South Garo Hills
126 Meghalaya South West Garo Hills
127 Meghalaya South West Khasi Hills
128 Meghalaya West Garo Hills
129 Meghalaya West Khasi Hills
130 Mizoram Champhai
131 Mizoram Kolasib
132 Mizoram Lawngtlai
133 Mizoram Lunglei
134 Mizoram Mamit
135 Mizoram Saiha
136 Mizoram Serchhip
137 Nagaland Kiphire
138 Nagaland Longleng
139 Nagaland Mon
140 Nagaland Peren
141 Nagaland Phek
142 Nagaland Tuensang
143 Nagaland Wokha
144 Nagaland Zunheboto
145 Odisha Gajapati
146 Odisha Kandhamal
147 Odisha Kendrapara
148 Odisha Malkangiri
149 Odisha Nawapara
150 Odisha Nawrangpur
151 Sikkim West Sikkim
152 Telangana Komram Bheem (Asifabad)
153 Tripura Gomati
154 Tripura Khowai
155 Tripura Sepahijala
156 Tripura Unakoti
157 Uttar Pradesh Ambedkar Nagar
158 Uttar Pradesh Auraiya
159 Uttar Pradesh Azamgarh
160 Uttar Pradesh Ballia
161 Uttar Pradesh Balrampur
162 Uttar Pradesh Basti
163 Uttar Pradesh Deoria
164 Uttar Pradesh Farrukhabad
165 Uttar Pradesh Gonda
166 Uttar Pradesh Jaunpur
167 Uttar Pradesh Kanpur Dehat
168 Uttar Pradesh Kaushambi
169 Uttar Pradesh Kushi Nagar
170 Uttar Pradesh Maharajganj
171 Uttar Pradesh Mau
172 Uttar Pradesh Pratapgarh
173 Uttar Pradesh Sant Kabir Nagar
174 Uttar Pradesh Shravasti
175 Uttar Pradesh Sidharthanagar
176 Uttar Pradesh Sitapur
177 Uttar Pradesh Sultanpur
178 Uttar Pradesh Unnao
179 Uttarakhand Bageshwar
180 Uttarakhand Rudraprayag
181 Uttarakhand Tehri Garhwal
182 West Bengal Bankura
183 West Bengal Jhargram
184 West Bengal Puruliya

ANNEX – II

An indicative list of eligible activities under Agriculture infrastructure and Ancillary activities is given below:

Agriculture infrastructure i) Loans for construction of storage facilities (warehouse, market yards, godowns and silos) including cold storage units/cold storage chains designed to store agriculture produce/products, irrespective of their location.

ii) Soil conservation and watershed development.

iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi composting.

iv) Loans for construction of oil extraction/ processing units for production of bio-fuels, their storage and distribution infrastructure along with loans to entrepreneurs for setting up Compressed Bio Gas (CBG) plants.

Ancillary activities (i) Loans for setting up of Agri-clinics and Agri-business centres.

(ii) Loans to Custom Service Units managed by individuals, institutions or organizations who maintain a fleet of tractors, bulldozers, well-boring equipment, threshers, combines, etc., and undertake farm work for farmers on contract basis.

(iii) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.

(iv) Loans sanctioned by banks to MFIs for on-lending to agriculture sector as per the conditions specified in paragraph 21 of these Master Directions.

(v) Loans sanctioned by banks to registered NBFCs (other than MFIs) as per conditions specified in paragraph 22 of these Master Directions.


ANNEX – III

Indicative list of Permissible Activities under Food Processing Sector as shared by Ministry of Food Processing Industries (MoFPI)

  1. Cleaning, Air Cooling (Field Heat Removal), Sorting, Grading/Sizing, Packaging, Warehousing, Distribution of Fruits & Vegetables etc.
  2. Transportation including in refrigerated van/Cold Chain infrastructure system Packaging and storage including techniques like Silo, Hermetic storage; pest management.
  3. Storage at low temperature/Cold Storage/Modified/Controlled Atmosphere packaging, Refrigeration/Chilling etc.
  4. Primary and/or Minimal Processing of F&V: – Blanching (Vegetables), Peeling, Cutting, Storage, Distribution at Low temperature, vacuum packaging etc.
  5. Sun Drying and Mechanical Drying: – Solar Drying, Hot air drying, Dehydration, hybrid drying, fluidized bed drying, refractive window drying, drum drying, radio frequency drying, Lyophilisation (Freeze Drying), Vacuum Drying, Spray Drying, De-hydro-freezing etc.
  6. Preservation through various methods; both traditional and modern.
  7. Frozen Products: Individually Quick Frozen (10F) of Fruit, Vegetables, Meat, Fish, Sea Foods etc.
  8. Milk and Milk products processing, including their transportation, packaging and storage.
  9. Canning of Fruit, Vegetables including Mushrooms, Meat, Fish, crustaceans, molluscs, other Sea Foods etc.
  10. Milling Grains, Legumes & Pulses, Preparation of their by-products such as Bran Oil, Cattle Feed/Poultry feed etc.
  11. Processing of F&V into different products such as juices, concentrates, sauces, jam, jellies, marmalades, Chips, Flakes, Powders etc.
  12. Processing of Grains & Pulses, Fish, Meat, Poultry, Sea Foods, Egg etc. into their different products including extruded, popped, puffed and flaked products and their packaging and storage including fumigation, Smoking etc.
  13. Oil seed Extraction- Rendering, Pressing, Hydrogenation, Refining with Extraction, Filling/packaging etc.
  14. Spices, Seasoning and Condiments – Grinding, Crushing, Milling, Sieving, Mixing, Blending, Roasting, Packaging, Storage, Distribution.
  15. Production of fermented Products and Alcoholic- Wines, Vinegar, Milk products, Prebiotics, Probiotics etc.
  16. Production of beverages – Juices, RTS, Nectar, Squash, Cordial, Syrups/Sherbets, Soups, Carbonated Beverages etc.
  17. Production of Cocoa, Coffee, Chicory and Tea Products; including Cocoa Butter, Cocoa Powder, Chocolates, wafers etc.
  18. Production of Bakery and Confectionary Products – Biscuits, Bread, Cakes, Cookies, Toffee etc.
  19. Production of Jaggery, Sugar, Khandasari etc from Sugarcane, Beet, Palm etc.
  20. Production of apiary products (honey processing; both natural and artificial honey).
  21. Production of Starch and Starch Products – Sago, Tapioca, Corn, Noodles, Macroni, Vermicelli etc,
  22. Slaughtering of animals/ruminants/birds etc. and their processing.
  23. Nuts Processing; coconut-based product processing such as water, nuts etc.
  24. Processing of other products such as Instant Mixes, Ready to Eat (RTE) retort-based products, ready to cook and Beverages etc.
  25. Nutraceutical products/functional foods/fortified food/enriched food preparation.
  26. Production of Organic food products.
  27. Processing of algal and fungal products (eg Spirulina, Mushrooms etc), including packaging and enhancement of shelf life.
  28. Processing plantation crops, packaging, storage and enhancement of shelf life.
  29. Production of food grade packaging material such as laminates, tetra packs, bottles, tin containers etc.

ANNEX – IV

Priority Sector achievement – Calculation of shortfall / excess

Illustration:

Tables No.1 and 2 below illustrate the method followed for computation of shortfall / excess in priority sector target achievement at the end of the financial year under the revised PSL guidelines.

(Table 1)
Amount in ₹ crore
Quarter ended PSL targets
(A)
Priority Sector Amount Outstanding
(B)
Adjustments for weightage on incremental credit to identified districts as per para 7 of MD
(C)
Shortfall / Excess
(B)+(C)-(A)
June 329615 316938 1625 -11052
September 308826 311945 -810 2309
December 317694 319291 -819 778
March 324560 321347 2925 -288
Total 1280695 1269521 2921 -8253
Average 320174 317380 730 -2063

 

(Table 2)
Amount in ₹ crore
Quarter ended PSL targets
(A)
Priority Sector Amount Outstanding
(B)
Adjustments for weightage on incremental credit to identified districts as per para 7 of MD
(C)
Shortfall / Excess
(B)+(C)-(A)
June 329615 327967 1500 -148
September 308826 312378 -729 2823
December 317694 327225 975 10506
March 324560 321315 -765 -4010
Total 1280695 1288885 981 9171
Average 320174 322221 245 2293

In the example given in Table – 1, the bank has overall shortfall of ₹2063 crore at the end of the financial year. In Table – 2, the bank has overall excess of ₹2293 crore at the end of the financial year.

The Adjustments due to weightage on incremental credit in identified districts as per para 7, will be as per the data submitted by banks in the Automated Data Extraction Project (ADEPT).

The same method will be followed for calculating the achievement of quarterly and yearly priority sector sub-targets.

Note: The computation of priority sector targets/sub-targets achievement will be based on the ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposures, whichever is higher, as at the corresponding date of the preceding year.


APPENDIX

LIST OF CIRCULARS CONSOLIDATED

Sr. # Circular No. Date Subject
1. DOR (PCB).BPD.Cir.No.12/09.09.002/2019-20 April 24, 2020 Non-achievement of Priority Sector Lending Targets by Primary (Urban) Co-operative Banks (UCBs) – Contribution to the Rural Infrastructure Development Fund (RIDF) and other funds
2. FIDD.CO.Plan.BC.No.19/04.09.01/2019-20 March 23, 2020 Priority Sector Lending – Lending by banks to NBFCs for On-Lending
5. FIDD.CO.Plan.BC.12/04.09.01/2019-20 September 20, 2019 Priority Sector Lending (PSL)-Classification of Exports under Priority Sector
6. FIDD.CO.Plan.BC.No.11/04.09.01/2019-20 September 19, 2019 Priority Sector Targets- Lending to Non-Corporate Farmers-FY 2019-20
7. FIDD.CO.Plan.BC 7/04.09.01/2019-20 August 13, 2019 Priority Sector Lending – Lending by banks to NBFCs for On-Lending
8. Master Directions FIDD.CO.Plan.BC No.08/04.09.01/2019-20 July 29, 2019 (Updated as on March 12, 2020) Master Directions – Priority Sector Lending – Small Finance Banks – Targets and Classification
9. FIDD.CO.Plan.BC.18 /04.09.01/2018-19 May 06, 2019 Priority Sector Lending – Targets and Classification
10. Letter to Indian Banks’ Association No. FIDD.CO.Plan.772/04.09.001/2018-19 October 4, 2018 Exemption of Special GOI Securities issued to Public Sector Banks from Adjusted Net Bank Credit (ANBC)
11. FIDD.CO.Plan.BC. 08/04.09.01/2018-19 September 21, 2018 Co-origination of loans by Banks and NBFCs for lending to priority sector
12. FIDD.CO.Plan.BC.07/04.09.01/2018-19 July 10, 2018 Priority Sector Lending – Targets and Classification: Lending to non-corporate farmers – System wide average of last three years
13. FIDD.CO.Plan.BC.22/04.09.01/2017-18 June 19, 2018 Priority Sector Lending – Targets and Classification
14. DCBR.BPD (PCB).Cir.No.07/09.09.002/2017-18 May 10, 2018 Revised guidelines on lending to Priority Sector for Primary (Urban) Co-operative Banks (UCBs)
15. FIDD.CO.Plan.BC.18/04.09.01/2017-18 March 1, 2018 Priority Sector Lending – Targets and Classification
16. FIDD.CO.Plan.BC.16/04.09.01/2017-18 September 21, 2017 Priority Sector Lending – Targets and Classification: Lending to non-corporate farmers – System wide average of last three years
17. FIDD.CO.SFB.No.9/04.09.001/2017-18 July 6, 2017 Small Finance Banks – Compendium of Guidelines on Financial Inclusion and Development
18. FIDD.CO.Plan.BC.No.17/04.09.001/2016-17 October 6, 2016 Priority Sector Lending – Revised Reporting System
19. DBR.NBD.No.26/16.13.218/2016-17 October 6, 2016 Operating Guidelines for Small Finance Banks
20. Master Directions DNBR PD.007 and 008/03.10.119/2016-17 September 1, 2016 (updated as on February 17, 2020) Master Directions 2016-NBFC-Non-SI-Non-deposit taking and SI-Non-Deposit and Deposit taking Company, respectively
21. FIDD.CO.Plan.BC.No.14/04.09.001/2016-17 September 1, 2016 Priority Sector Lending-Targets and Classifications: Lending to Non-corporate Farmers – System Wide Average of last three years
22. FIDD.CO.Plan.BC.No.10/04.09.001/2016-17 August 11, 2016 Priority Sector Lending Status for Factoring Transactions
23. FIDD.CO.Plan.BC.No.8/04.09.001/2016-17 July 28, 2016 PSL-Targets and Classification – Bank loans to MFIs for on-lending- Qualifying asset – Revised loan limit
24. Master Directions FIDD.CO.Plan.2/04.09.01/2016-17 July 07, 2016 (Updated as on June 18, 2019) Master Directions – Regional Rural Banks – Priority Sector Lending – Targets and Classification
25. FIDD.CO.Plan.BC.23/04.09.01/2015-16 April 7, 2016 Priority Sector Lending Certificates
26. DBOD Mailbox clarification March 28, 2016 Bank loans to proprietorship under Priority Sector
27. DBOD Mailbox clarification March 17, 2016 Eligibility of IBPC as Priority Sector Asset
28. FIDD.CO.Plan.BC.No.14/04.09.01/2015-16 December 03, 2015 Regional Rural Banks – Priority Sector Lending – Targets and Classification
29. DBOD Mailbox clarification November 27, 2015 Bank loans to SHGs/ JLGs- Processing Charges
30. FIDD.CO.Plan.BC.13/04.09.01/2015-16 November 18, 2015 Priority Sector Lending-Targets and Classification
31. DBOD Mailbox clarification September 7, 2015 Calculation of shortfall/ excess
32. DBOD Mailbox clarification August 14, 2015 Social Infrastructure and Bank loans to MFIs for on-lending – Social Infrastructure
33. FIDD.CO.Plan.BC.08/04.09.01/2015-16 July 16, 2015 Priority Sector Lending –Targets and Classification
34. DBOD Mailbox clarification June 26, 2015 Outstanding deposits with MUDRA Ltd. On account of priority sector shortfall
35. DBOD Mailbox clarification June 12, 2015 Loans to Minority Communities
36. DBOD Mailbox clarification June 11, 2015 Loans to Custom Service Units
37. FIDD.CO.Plan.BC.54/04.09.01/2014-15 April 23, 2015 Priority Sector Lending-Targets and Classification
38. DCBR.BPD.(PCB) Cir.No. 7/14.01.062/2014-15 March 19, 2015 Priority Sector Lending – Persons with Disabilities (PwD) – Inclusion under Weaker Sections
39. DCBR.BPD.(PCB) Cir.No. 5/14.01.062/2014-15 February 18, 2015 Credit Facilities to Minority Community – Inclusion of Jain Community under Section 2© of National Commission of Minorities (NCM) Act, 1982
40. UBD.BPD.(PCB).Cir.No.72/13.01.000//2013-14 June 11, 2014 Section 42(1) of the Reserve Bank of India Act, 1934 and Section 18 & 24 of the Banking Regulation Act, 1949 (AACS)- FCNR (B)/NRE deposits – Exemption from Maintenance of CRR/SLR and Exclusion from ABC for Priority Sector Lending
41. UBD.CO.BPD.(PCB).Cir.No.13/09.22.010/2013-14 September 10, 2013 Finance for Housing Schemes – Primary (Urban) Co-operative Banks – Loans for Repairs / Additions / Alterations – Enhancement of Limits
42. UBD.BPD.(PCB).CIR.No.5/13.01.000/2013-14 August 27, 2013 Section 42(1) of the Reserve Bank of India Act, 1934 and Section 18 and 24 of the Banking Regulation Act, 1949 (AACS) – FCNR (B) / NRE Deposits – Exemption from Maintenance of CRR / SLR and Exclusion from ABC for Priority Sector Lending
43. UBD.BPD.(PCB).CIR.No.33/09.09.001/2011-12 May 18, 2012 Priority Sector Lending -Indirect Finance to Housing Sector.
44. UBD.BPD.(PCB)CIR.No.50/13.05.000(B)/2010-11 June 2, 2011 Financing of Self Help Groups (SHGs) and Joint Liability Groups (JLGs) by Primary (Urban) Co-operative Banks (UCBs)
45. UBD.CO.BPD.No.70/09.09.001/2009-10 June 15, 2010 Advances to MSEs engaged in exports and export credit to agriculture / allied activities
46. UBD.BPD(PCB).Cir.No.50/09.09.01/2009-10 March 25, 2010 Categorisation of activities under Services
47. UBD.PCB.Cir.No.26/09.09.001/07-08 November 30, 2007 Priority Sector lending-Revision of target – UCBs
48. UBD.PCB.Cir.No.11/09.09.01/07-08 August 30, 2007 Revised Guidelines on Lending to Priority Sector for UCBs
49. UBD.PCB.Cir.No.11(126A)/09.09.001/2007-08 August 30, 2007 Priority Sector Advances – List of minority Concentrated Districts

1 Includes negotiable warehouse receipt (NWR) and electronic negotiable warehouse receipt (e-NWR)

2 Includes negotiable warehouse receipt (NWR) and electronic negotiable warehouse receipt (e-NWR)

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