RBI released updated PSL guidelines for banks

Current Context: The Reserve Bank of India (RBI) released updated Priority Sector Lending (PSL) guidelines on March 24, 2025, effective from April 1, 2025.

• These revisions aim to enhance credit flow to key sectors like housing, renewable energy, MSMEs, and agriculture.

Highlights:

• Housing Loans: Increased limits based on population tiers (₹50 lakh for cities with 50 lakh+ population, ₹45 lakh for cities with 10-50 lakh population, ₹35 lakh for smaller towns).
• Renewable Energy: Loans up to ₹35 crore for renewable energy projects and ₹10 lakh per household for individual renewable energy initiatives now qualify under PSL.
• Urban Cooperative Banks (UCBs): Revised PSL target to 60% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE).
• Weaker Sections: Expanded eligibility, removing caps on loans to individual women beneficiaries.

These updates aim to promote inclusivity, sustainability, and financial accessibility.

Question:

Q.1 According to the updated RBI Priority Sector Lending (PSL) guidelines effective April 1, 2025, what is the revised housing loan limit that qualifies under PSL for cities with a population of 5 million (50 lakh) and above?
a) ₹35 lakh
b) ₹40 lakh
c) ₹45 lakh
d) ₹50 lakh

Answer: d) According to the updated RBI Priority Sector Lending (PSL) guidelines effective April 1, 2025, Increased limits based on population tiers (₹50 lakh for cities with 50 lakh+ population, ₹45 lakh for cities with 10-50 lakh population, ₹35 lakh for smaller towns).