Start-ups brought under priority sector lending

Tribune News Service

New Delhi, September 4

The Reserve Bank of India (RBI) has asked banks to include loan to start-ups and agriculture solar power plants in the revised priority sector lending (PSL) guidelines.

While start-ups will be able to avail loans up to a limit of Rs 50 crore, solar power plants will be eligible for PSL in case of grid connected agriculture pumps.

The PSL also includes compressed biogas (CBG) plants as a fresh category.

The intention behind the PSL revision is to align it with emerging national priorities and bring sharper focus on inclusive development, said the RBI.

The RBI also increased the credit limit for farmers producer organisations (FPOs) undertaking farming with assured marketing of their produce at a pre-determined price. The loan limit for renewable energy has also been doubled and there has been a hike in the credit limit for health infrastructure (including those under Ayushman Bharat).

The RBI expects revised PSL to lead to better credit penetration to credit deficient areas, increase lending to small and marginal farmers and weaker sections, boost credit to renewable energy and health infrastructure.

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