RBI Proposes Raising Priority Sector Loan Limit To Rs 100 Crore For Agriculture Infra And Food Processing

RBI Proposes Raising Priority Sector Loan Limit To Rs 100 Crore For Agriculture Infra And Food Processing

MENAFN- KNN India) New Delhi, Nov 6 (KNN) The Reserve Bank of India (RBI) has proposed allowing bank loans of up to Rs 100 crore per borrower for agriculture infrastructure and food and agro-processing activities under priority sector lending (PSL), potentially improving access to institutional credit for enterprises, including MSMEs, across the agricultural value chain.

The proposal is part of the central bank's draft PSL Directions released on Thursday to consolidate and review existing guidelines for regulated entities, including commercial banks and regional rural banks.

Under the draft, the Rs 100-crore limit will apply to aggregate sanctioned loans across the banking system for each eligible activity.

Banks will have to sanction separate limits, obtain borrower declarations on loans from other banks for the same purpose and independently verify aggregate exposure. The limit will be calculated facility-wise and will exclude other priority and non-priority sector exposures.

Eligible agriculture infrastructure includes warehouses, market yards, godowns, silos, cold-storage f...