Priority Sector Lending (PSL) limits need expansion and inclusion of new categories to align with the development goals of Viksit Bharat at 2047, as per a report. The report, by SBI Research, suggests considering areas like ESG Financing, SDG Commitment, Infrastructure Lending, and Financing to EV Ecosystem for PSL lending.
Banks are currently meeting the 40% overall PSL target, with a possible increase to 45% of Adjusted Net Bank Credit by FY26. The report emphasizes the need for a comprehensive review due to the emergence of new lending areas.
The research firm proposes raising sectoral limits, such as increasing renewable energy loans from Rs 35 crore to Rs 100 crore and home loans to Rs 1 crore in metro centers and Rs 75 lakh elsewhere. Additionally, it suggests elevating education loans to Rs 50 lakh and social infrastructure loans to Rs 25 crore across all cities.
Moreover, the report recommends enhancing bank loans to Non-Banking Financial Companies (NBFCs) for on-lending, with specific amounts allocated for agriculture and other sectors. It also suggests granting priority sector status to all infrastructure loans or exempting them from PSL calculation, aligning with infrastructure and affordable housing funding through infra bonds.
