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PRIORITY SECTOR LENDING (PSL)

PRIORITY SECTOR LENDING(PSL)

PSL has an important role to play ,given by RBI to the banks for providing a specific portion of the bank lending to specific sectors.
 
PSLC ( Priority Sector Lending Certificate)  , These are the certificates issued by banks that had over achieved their target buyers of PSL . PSLC  are usually those banks  which have a short fall.   

The sectors essential for lending are as follows:-
A. HOUSING
B. RENEWABLE RESOURCES
C. SOCIAL INFRASTRUCTURE
D. EDUCATION
E. EXPORTS
F. MSME( Micro , small and medium enterprises)
G. AGRICULTURE and  Others

* HOUSING
Loan to individuals upto ₹ 35 lakh in metropolitan area and ₹ 25 lakh in other areas . For purchase or construction of a housing unit per family excluding bank own employees.
Loans for repair of houses  upto ₹ 2,00,000 rural or semi-rural areas and ₹ 5,00,000 for urban or metropolitan areas .
AREAS                                   POPULATION 
Metropolitan   [Tier1]          10 lakh and Above
areas             

Semi-Urban     [Tier2]            50000 to 99999
 areas               [Tier3]            20000 to 49000
                        [Tier4]             10000 to 19000

  Rural             [Tier5]             5000 to 9999
   areas             [Tier6]             less than 5000

     
* RENEWABLE  RESOURCES
 Bank gives loan upto a limit of ₹15 crore to borrowers for purpose like Solar life generator, Wind mills  . For individual household the loan limit is ₹ 10 lakh  for borrowers and for group of persons   or company the loan limit is ₹ 15 crore.

* SOCIAL INFRASTRUCTURE
Bank gives loan upto  a limit of ₹ 5 crore per borrowers for building social infrastructure namely school, health care facility, drinking water facility and sanitation facilities    (given in tier 2).

* EDUCATION
Loan for individual in education upto ₹ 10 lakh in domestic  and ₹ 20 lakh for foreign studies .

* EXPORT SECTOR
A loan limit upto ₹250 million per borrower , unit having turnover of upto ₹ 1 billion .

* MSME 
MSME ( Micro , Small and Medium Enterprises) is a sector in which loans are given to micro, small and medium enterprises . MSMED Act , this act  refers to micro, small and medium enterprise development  , passed in 2006 to regulate the scheme.
                         Secondary                    Tertiary  
                                 Plant and Machinery
Micro             upto ₹25 lakh              upto ₹10 lakh
Small            ₹25lakh to 5crore   ₹ 10lakh to2crore
Medium       ₹ 5crore to10lakh    ₹ 2crore to 5crore

* AGRICULTURE 
It is divided into 3 categories 
i) Farm credit
> loan upto ₹ 50 lakh against hypothetication of agricultural products . 
ii) Agriculture  Infrastructure 
> aggregate loan limit to ₹ 100 crore  for soil conservation , plant tissue culture , e.t.c.
iii) Ancillary Activities
> loan  upto₹ 5 crore to cooperative   societies of  farmers for agricleaning, agribusiness centre.

* OTHERS  
1) loan not exceeding ₹50,000 per borrower provided directly banks individual and SHG(Self help group)  whose annual income does not cross one lakh per annum and for urban areas ₹1,60,000.
2) loan to distressed person not exceeding ₹1,00,000per borrowers to repay  their debt.
3) loan given to SC/ST 
+Non achievemrnt of PSL lending.
a)Short term lending  PSL target shall be contributed to RIDF created by NABARD  and for foreign bank IDB  (Industrial Development  Bank) created by SIDBI (Small Industrial  Development of India). 
+ Weaker Section 
a) Beneficiary  of DRI (Different Rate of Interest).
b) Overdraft limit of PMJDY( Pradhan Mantri  Jandhar yojana) account holder upto ₹ 10,000. age limit is 18 yrs to 65 yrs.
c) loan to persons with disability
d) loan to distressed farmer.

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