Bank finance to start-ups, farmers, others up to 50 crore rupees

Bank finance to start-ups, farmers, others up to 50 crore rupees – RBI revised guidelines 

The Reserve Bank of India has revised Priority Sector Lending (PSL) guidelines. In the revised RBI guidelines, to provide the lending facilities, higher weightage have been assigned to incremental priority sector credit in identified districts. Such lendings help the country to grow holistically.

Priority section loans

Priority sector loans are those loans that banks have to compulsorily lend to the economically weaker sections of the society. The target sections are “small and marginal farmers” and “weaker sections.”

Aim of revising PSL guidelines

The RBI has revised the PSL guidelines to address regional disparities in the flow of priority sector credit. Further, the revised PSL guidelines will enable better credit penetration to credit deficient areas. Thus, it will increase lending to small, marginal farmers and weaker sections.

Moreover, the revised guidelines will help to bring a sharper focus on inclusive development.

Eligibility for taking loans under PSL

Under the priority lending sector, bank finance to start-ups, and farmers up to 50 crore rupees. Further, agriculture and allied activities, micro and small enterprises, poor people for housing, students for education, and other low-income groups are also under the weaker sections eligible to get loans.

The farmers are eligible to use the loans for the installation of solar power plants for the solarisation of grid-connected agriculture pumps and setting up Compressed Bio Gas plants. All these works are included in fresh categories eligible for finance under the priority sector.

Revision in existing PSL guidelines:

  • The RBI has also increased the loan limits for renewable energy.
  • The credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled to improve health infrastructure.
  • 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.

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