RBI issues guidelines to boost renewable energy

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The Reserve Bank of India (RBI), on September 4 issued revised guidelines after comprehensively reviewing priority sector lending (PSL) guidelines to align it with national priorities and bring a sharper focus on inclusive development.

The revised RBI PSL guidelines will enable better credit penetration to credit deficient areas, increase lending to small and marginal farmers and weaker sections and boost credit to the renewable energy sector.

Under this initiative, banks will finance start-ups (up to ₹50 crores), extend loans to farmers for installation of solar power plants for solarisation of grid-connected agriculture pumps and loans for setting up compressed biogas (CBG) plants.

The PSL guidelines aim to address regional disparities in the flow of priority sector credit.

Higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.

A higher credit limit has been specified for farmers’ producers’ organizations and farmers and producers companies undertaking farming with assured marketing of their produce at a pre-determined price.

Loan limits for renewable energy have been doubled.