SAURABH SAKPAL

19BSP2516

Q22

Priority Sector Lending means those sectors which the Government of India and Reserve
Bank of India consider as important for the development of the basic needs of the
country and are to be given priority over other sectors. The banks are mandated to
encourage the growth of such sectors with adequate and timely credit.

Priority Sector includes the following categories:

1. Agriculture
2. Micro, Small and Medium Enterprises (MSME)
3. Export Credit
4. Education
5. Housing

Guidelines fr om RBI:-

 It will enable 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, it said.

 Higher weightage has been assigned to incremental priority sector credit in

‘identified districts’ where priority sector credit flow is comparatively low.

 Bank finance for 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 the priority sector. Bank finance for
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 the priority sector.

 Besides, loan limits for renewable energy have been doubled and for
improvement of health infrastructure, credit limit for health infrastructure
(including those under ‘Ayushman Bharat’) has been doubled.