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Bank loans to start-ups to get priority sector tag as RBI revises PSL guidelines

Updated: September 5, 2020 2:04 pm

Reserve Bank of India has revised Priority Sector Lending guidelines. RBI said the move is aimed at addressing regional disparities in the flow of priority sector credit. In the revised guidelines, higher weightage have been assigned to incremental priority sector credit in identified districts where priority sector credit flow is comparatively low.

Bank finance to start-ups up to 50 crore rupees, loans to farmers for installation of solar power plants for solarisation of grid connected agriculture pumps and loans for setting up Compressed Bio Gas plants have been included as fresh categories eligible for finance under priority sector.

Priority sector loans refer to loans that banks need to mandatorily lend to economically weaker sections of the society.

Also, the targets prescribed for “small and marginal farmers” and “weaker sections” are being increased in a phased manner, the RBI said.

The RBI also said loan limits for renewable energy have been increased under the revised guidelines. For improvement of health infrastructure, credit limit for health infrastructure (including those under ‘Ayushman Bharat’) has been doubled, the RBI said.

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