RBI Revises Priority Sector Lending Norm

Key Changes

Housing Loan Limits Under Priority Sector

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• Population > 5 million:
  • Loan up to ₹50 lakh
  • Maximum dwelling unit cost: ₹63 lakh
• Population between 1 million and 5 million:
  • Loan up to ₹45 lakh
  • Maximum dwelling unit cost: ₹57 lakh
• Population < 1 million:
  • Loan up to ₹35 lakh
  • Maximum dwelling unit cost: ₹44 lakh

• Up to ₹35 lakh in metro areas (population > 10 lakh)
• Up to ₹25 lakh in other centres
• Maximum dwelling unit costs: ₹45 lakh (metros), ₹30 lakh (others)

Renewable Energy (RE) Loan Limit Enhancements

• For RE-based power generators and public utilities (street lighting, village electrification):
  • Loan limit increased to ₹35 crore (from ₹30 crore)
  • Eligible for priority sector classification
• For individual households:
  • Limit unchanged at ₹10 lakh per borrower

Changes for Urban Cooperative Banks (UCBs)

• Overall PSL target revised to 60% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (CEOBSE), whichever is higher
• Earlier target was 75% (to be achieved by FY26 with interim milestones)

Weaker Sections Lending

• Expanded list of eligible borrowers
• Removal of the cap on loans by UCBs to individual women beneficiaries

Current Status (as per January 2024):

• Housing loans worth ₹7.47 trillion classified under priority sector

Performance in FY24:

• Priority sector lending by scheduled commercial banks rose by 16.9% (up from 10.8% in FY23)
• All bank groups met their overall priority sector lending targets and sub-targets

The RBI’s revised priority sector lending guidelines are aimed at expanding financial inclusion and promoting renewable energy investments. By enhancing housing loan limits and broadening eligible categories, the central bank is support