Objective

Priority Sector Lending (PSL) aims to ensure that adequate institutional credit reaches sectors of the economy which impact large sections of the population, weaker sections, and are employment-intensive, such as agriculture and micro enterprises.

Categories under Priority Sector

• Agriculture – including farm credit, agriculture infrastructure, ancillary activities
• Micro, Small and Medium Enterprises (MSMEs)
• Export Credit
• Education
• Housing
• Social Infrastructure
• Renewable Energy
• Others – includes loans to weaker sections, self-help groups, and distressed persons

Sub-targets for Commercial Banks

• Total PSL: 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure (whichever is higher)
• Agriculture: 18% of ANBC, of which 8% should be for small and marginal farmers
• Micro Enterprises: 7.5% of ANBC
• Weaker Sections: 12% of ANBC

Eligible Activities under PSL

Agriculture

• Crop loans, Kisan Credit Card
• Agri infrastructure: storage, irrigation, cold chains
• Allied activities: dairy, fisheries, poultry

MSMEs

• Manufacturing or service sector enterprises with investment & turnover under defined limits
• Working capital and term loans to MSMEs

Housing

• Loans for construction/purchase of residential units up to ₹35 lakh in metros and ₹25 lakh in other areas

Education

• Education loans up to ₹10 lakh for studies in India and ₹20 lakh abroad

Renewable Energy

• Loans up to ₹30 crore to individuals, households, or companies for solar, wind, biomass, and micro-hydro

Social Infrastructure

• Loans up to ₹10 crore for schools, drinking water facilities, and sanitation

Weaker Sections

Includes SC/ST, small and marginal farmers, artisans, self-help groups (SHGs), and individuals below the poverty line (BPL).