Rbi revamps lending rules for priority sectors

The Reserve Bank of India has rolled out revamped guidelines for Priority Sector Lending, set to kick in from April 1, 2025, funneling sharper bank credit into key economic slices like agriculture, MSMEs, and renewable energy. “The enhanced coverage will better target priority sectors,” the RBI says, tweaking loan limits and eligibility to juice up access where it’s needed most—housing, education, and green power included.

Big shifts hit housing loans—Rs 50 lakh caps for cities over 50 lakh souls, Rs 45 lakh for mid-tier hubs, and Rs 35 lakh for smaller towns, all tied to dwelling costs. Renewable energy gets a boost too—loans up to Rs 35 crore for power projects and Rs 10 lakh for households now count, while urban cooperative banks see their PSL target bumped to 60% of adjusted net bank credit. A loan officer in Mumbai might blink at the paperwork, but the intent’s clear—spread the wealth wider.

The overhaul also lifts caps on urban co-op bank loans to women and expands the ‘weaker sections’ list, aiming to pull more folks into the financial net. Export credit, social infrastructure, and the usual suspects—agriculture and MSMEs—stay in the mix, with the RBI betting this rejig drives growth that sticks.