The document discusses India's Priority Sector Lending (PSL) guidelines. It defines PSL as lending by banks to sectors like agriculture, micro, small and medium enterprises, housing, education etc. that are considered economically important. Banks must lend at least 40% of their adjusted net bank credit or credit equivalent amount of off-balance sheet exposure to these priority sectors. Specific lending targets are set for sectors like agriculture (18%), micro enterprises (7.5%), and weaker sections (10%). Eligible activities under priority sectors and their loan limits are also defined.

1. PRIORITY SECTOR LENDING (PSL)

2. Content
• Why Priority Sector
• How much for Priority Sector
• Categories of Priority Sector
• Weaker Sections Under Priority Sector
• Agricultural Credit
• MSMEs
• Export Credit
• Education
• Housing
• Social Infrastructure
• Renewable Energy
• Others
• Common Guidelines for PSL

3. Why Priority Sector ?
• For developing economies
• The RBI, has specified the sectors that are termed the priority
sectors. The lending that is done to them is referred to as ‘Priority
Sector Lending’
• Compulsory credit exposure to priority sector

4. How Much for Priority Sector ?
Categories Domestic commercial banks & foreign banks with 20
branches & above
Total Priority Sector 40% of Adjusted Net Bank Credit
Agriculture
Small & Marginal
Farmers
18%
8%
Micro Enterprises 7.5%
Advances to Weaker
Sections
10%

5. Categories of Priority Sector
• Agriculture
• Micro, Small & Medium Enterprises
• Export Credit
• Education
• Housing
• Social Infrastructure
• Renewable Energy
• Others

6. Weaker Sections Under Priority Sector
Sr. No. Category
I Small & Marginal Farmers
II Artisans, village & cottage industries where individual credit limits do not exceed ₹ 1 lakh
III Beneficiaries under Govt. Sponsored Schemes as NRLM, NULM & SRMS
IV Scheduled Castes(SC) & Schedules Tribes(ST)
V Beneficiaries of Differential Rate of Interest (DRI) Scheme
VI Self Help Groups (SHGs)
VII Distressed farmers indebted to non-institutional lenders
VIII Distressed person other than farmers, with loan amount not exceeding ₹ 1 lakh per borrower to prepay their debt
to non-institutional lenders
IX Individual women beneficiaries up to ₹ 1lakh per borrower
X Persons with disabilities
XI Overdrafts up to ₹5,000 under PMJDY a/c, provided the borrowers household annual income does not exceed ₹1
lakh for rural areas & ₹1.6 lakh for non-rural areas
XII Minority communities as may be notified by GOI from time to time

7. AGRICULTURAL CREDIT
CROP LOANS AND SHORT TERM LOANS
MEDIUM AND LONG-TERM LOANS FOR AGRIC & ALLIED ACTIVITIES
PRE & POST-HARVEST ACTIVIES
AGAINST PLEDGE OF AGRICULTURAL PRODUCE ₹50 LAKHS – 12 MONTHS
DISTRESSED FARMERS INDEBTED TO NON-INSTITUTIONAL LENDERS
KISAN CREDIT CARD SCHEME
SMALL AND MARGINAL FARMERS FOR PURCHASE OF LAND FOR AGRICULTURAL PURPOSES
CROP LOANS AND SHORT TERM LOANS
MEDIUM AND LONG TERM LOANS FOR AGRIC & ALLIED ACTIVITIES
PRE & POST-HARVEST ACTIVIES
AGAINST PLEDGE OF AGRICULTURAL PRODUCE ₹50 LAKHS – 12MONTHS
FARM CREDIT AGRICULTURAL INFRASTURE ANCILLARY SERVICES
INDIVIDUALS
CORPORATES
Up to ₹2 Cr.

8. Who Are Small & Marginal Farmers ?
• Marginal Farmers: Up to 1 hectare
• Small Farmers : 1 hectare – 2 hectare
• Landless agricultural labourers, tenant famers, oral lessees & share-croppers,
whose share of landholding is within the limits prescribed for small &
marginal farmers.
• Loans to SHGs or JLGs
• Loans to farmer’s producer companies of individual farmers, & co-operatives
of farmers directly engaged in Agriculture & Allied Activities.

9. Agricultural Crop Loans

10. Agricultural Term Loan
Fencing
Dairy Farm
Poultry Husbandry Poly Houses Farm Mechanisation
Minor Irrigation

11. Agriculture Infrastructure
I. Loans for construction of storage facilities
Warehouse,
Market Yards,
Godowns,
Silos,
Cold Storage.
II. Soil conservation & watershed development
III. Plant tissue culture & Agri-biotechnology, seed production, production of bio-
pesticides, bio-fertilizer & vermi composting
Up to limit ₹ 100 Crores per borrower from the banking system.

12. Ancillary Services
• Loans up to ₹5 crore to co-operative societies of farmers for disposing of
the produce of members.
• Loans for setting up of Agri-clinics and Agribusiness Centers.
• Loans for Food and Agro-processing up to an aggregate sanctioned limit of ₹
100 crore per borrower from the banking system.
• Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service
Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for
on-lending to agriculture.
• Loans sanctioned by banks to MFIs for on-lending to agriculture sector
• Outstanding deposits under RIDF and other eligible funds with NABARD on
account of priority sector shortfall.

13. Micro, Small & Medium Enterprises(MSMEs)
(MSMED Act, 2006)
Ceiling on Investment in Ceiling on Investment in
Plant & Machinery Equipment
All loans to units in the Khadi and Village Industries is Micro Enterprises
Enterprises
Manufacturing
Enterprises
Service
Enterprises
₹ 25 Lakhs
₹ 5 Crores
₹ 10 Crores
₹10 Lakhs
₹ 2 Crores
₹ 5 Crores
Micro
Small
Medium

14. Export Credit
(Pre-Shipment & Post-Shipment Export Credit)
Domestic Banks
Incremental export credit over
corresponding date of the
preceding year, up to 2 percent of
ANBC or Credit Equivalent Amount
of Off-Balance Sheet Exposure,
whichever is higher, effective from
April 1, 2015 subject to a
sanctioned limit of Rs 25 crore per
borrower to units having turnover
of up to Rs 100 crore
Foreign Banks with 20 Br. &
above
Incremental export credit over
corresponding date of the
preceding year, up to 2 percent of
ANBC or Credit Equivalent Amount
of Off-Balance Sheet Exposure,
whichever is higher, effective from
April 1, 2017
Foreign Banks with less
than 20 Br.
Export credit will be allowed up to
32 percent of ANBC or Credit
Equivalent Amount of Off-Balance
Sheet Exposure, whichever is
higher.

15. Education
Loans to individuals for educational purposes
including vocational courses up to ₹10 lakh
irrespective of the sanctioned amount
will be considered as eligible for priority sector.

16. Housing
METROPOLITAN CITIES
(population 10 lakh & above)
OTHER PLACES
For Purchase/construction of
dwelling unit per family
COST ₹45 Lakhs ₹30 Lakhs
LOAN ₹35 Lakhs ₹25 Lakhs
REPAIRS ₹5 Lakhs ₹2 Lakhs

17. Social Infrastructure
Infrastructure
Up to ₹ 5 Crores
Drinking Water Hospitals
Sanitation Schools & Collages

18. Renewable Energy
Up to ₹ 15 Crore
Individual Household ₹ 10 lakh
Solar Power Bio Mass Power
Street Lighting Wind Power

19. Others
• Loans not exceeding ₹ 50,000/- per borrower provided directly by banks to
individuals and their SHG/JLG, provided the individual borrower’s household
annual income in rural areas does not exceed ₹ 10,00,000/- and for non-rural
areas it does not exceed ₹16,00,000/-.
• Loans to distressed persons not exceeding ₹10,00,000/- per borrower to
prepay their debt to non-institutional lenders.
• Overdrafts extended by banks up to ₹ 5,000/- under PMJDY accounts
provided the borrowers household annual income does not exceed ₹
100,000/- for rural areas and ₹1,60,000/- for non-rural areas.
• Loans sanctioned to State Sponsored Organizations for Scheduled Castes/
Scheduled Tribes for the specific purpose of purchase and supply of inputs
and/or the marketing of the outputs of the beneficiaries of these
organizations.

20. Common Guidelines For Priority Sector Loans
• Rate of Interest
• Service Charges
• Loan Application Register
• Issue of Acknowledgement of Loan Application

21. THANK YOU…!!!