PRIORITY SECTOR LENDING

Highlights of PSL

It means provide credit to the needy sectors of the society. The sectors are:

• Agriculture

• Micro and Small Enterprises

• Education

• Housing

• Export

• Weaker Sections

• Social Infrastructure 

• Renewable Energy

Targets under PSL

• Agriculture: 18% of ANBC. Out of this 18%, a target of 8% of ANBC is for Small and Marginal Farmers, to be achieved in a phased manner i.e., 7% by March 2016 and 8% by March 2017.

• Weaker Sections: 10% of ANBC.

• Micro Enterprises: 7.5% of ANBC has been prescribed for Micro Enterprises, to be achieved in a phased manner

i.e. 7% by March 2016 and 7.5% by March 2017.

• Overall PSL Target for Domestic Bank/Foreign Bank with more than 20 Branches: 40% of Adjusted Net Bank Credit.

• Overall PSL Target for Foreign Bank with less than 20 Branches: 40% of Adjusted Net Bank Credit to be achieved in a phased manner-

2015-16                     32

2016-17                     34

2017-18                     36

2018-19                     38

2019-20                     40

• Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a landholding of more than 1 hectare and upto 2 hectares are considered as Small Farmers.
•  Scheduled Commercial 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. For Renewable Energy, bank loans up to a limit of Rs.15 crore to borrowers for purposes like solar based power generators, etc. For individual households, the loan limit will be Rs.10 lakh per borrower.
• For Housing, banks can provide loans to individuals up to Rs. 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rs. 20 lakh in other centres for purchase/construction of a dwelling unit per family. 
•  Export credit will be allowed up to 32% of ANBC for Foreign banks with less than 20 branches in India.
• For Education, banks can provide loans to individuals for educational purposes including vocational courses upto Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad.
•  Limits under Social infrastructure Bank loans up to a limit of ₹ 5 crore per borrower for building social infrastructure for activities namely schools, health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.