S No 02 - Priority Sector Lending (PSL) – Part 02
The Banking Tutor
Question Answer Series 2025
S No 02
03-06-2025
Priority Sector Lending (PSL) – Part 02
01. What are the norms related to
classification of Farm credit (under PSL) against NWR to NCF ?
Loans against
pledge/hypothecation of warehouse receipts for a period not exceeding 12 months
subject to a limit up to ₹90 lakh against Negotiable Warehouse Receipt
(NWRs)/Electronic Negotiable Warehouse
Receipt (eNWRs) and up to ₹60 lakh against warehouse receipts other than
NWRs/eNWRs can be treated under PSL.
02. What are norms related to
classification of Farm credit to Corporates under PSL ?
Farm Loans up to an aggregate limit of ₹4 crore per borrowing
entity will be eligible in case of
Corporate entities are eligible for classification under PSL.
03. What are norms related to
classification of Farm credit against Warehouse Receipts to Corporates under
PSL ?
Farm Loans to Corporates up to
₹4 crore against pledge/hypothecation of
warehouse receipts for a period not exceeding 12 months against
NWRs/eNWRs and up to ₹2.5 crore against warehouse receipts other than
NWRs/eNWRs are eligible for classification under PSL.
04. What are the norms for
classification of Credit to FRO/FPC?
The following are eligible for
classification under PSL.
(a) Loans up to ₹10 crore per
borrowing entity to FPOs/FPCs undertaking farming with assured marketing of
their produce at a pre-determined price.
(d) Loans up to ₹10 crore for
purchase of the produce of members directly engaged in agriculture and allied
activities.
05. What are FPO and FPC ?
FPO stands for Farmer Producer
Organisation, while FPC stands for Farmer Producer Company.
FPOs are a broader term
encompassing various forms of collective farming, including cooperatives and
trusts.
FPCs are a specific type of
FPO, registered as companies under the Companies Act, 2013.
FPC is a type of FPO, but with
a specific legal structure.
06. What are the norms for
classification of credit to Agriculture Infrastructure under PSL ?
Loans for agriculture
infrastructure will be subject to an aggregate sanctioned limit of ₹100 crore
per borrower from the banking system can be classified under PSL.
07. What are the norms for
classification of credit to Ancillary Services under PSL?
a) Loans up to ₹50 crore to
Start-ups that are engaged in agriculture and allied services.
b) Loans for Food and
Agro-processing up to an aggregate sanctioned limit of ₹100 crore per borrower
from the banking system (eligible activities specified).
c) Outstanding deposits under
RIDF and other eligible funds with NABARD on account of priority sector
shortfall.
08. What is limit of Farm Credit to NBFC for on-lending
for classification under PSL ?
Bank credit to registered NBFCs
(other than MFIs) towards on-lending for ‘term lending’ component under
agriculture will be eligible for PSL classification up to ₹10 lakh per borrower
are eligible for classification under PSL.
09. What is limit of Credit to NBFC for on-lending for
MSME classification under PSL ?
Loans to registered NBFCs
(other than MFIs) for on-lending to MSME up to Rs.20 lakh per borrower as per conditions
specified.
10. Up-to what amount of loan to
individual solely engaged in allied activities without any land holding we can
consider as PSL?
Loans up to ₹2.5 lakh to
individuals solely engaged in allied activities without any accompanying land
holding criteria.
11. Up-to what amount of loan to
Startup in MSE we can consider as PSL?
Loans up to ₹50 crore to
Start-ups, that conform to the definition of MSME, shall be eligible to be classified under this
category.
12. What is the criteria to classify
a housing loan in Centres with population of 50 lakh and above ?
Maximum cost of dwelling unit
Rs 63 lacs
and Maximum Loan Rs 50 lac
13. What is the criteria to classify
a housing loan in Centres with population of 10 lakh and above but below 50 lacs ?
Maximum cost of dwelling unit Rs 57 lacs maximum Loan Rs 45 lacs
14. What is the criteria to classify
a housing loan in Centres with population below 10 lakh?
Maximum
cost of dwelling unit Rs 44 lacs and
Maximum Loan Rs 35 lacs.
15. What the criteria is to classify
a housing loan for repairs in Centres with population of 50 lakh and above ?
Maximum cost of dwelling unit
Rs 63 lacs and Maximum Loan Rs 15 lacs.
16. What the criteria is to classify
a housing loan for repairs in Centres with population of 10 lakh and above but below
50 lacs.
Maximum cost of dwelling unit
Rs 57 lacs and Maximum Loan Rs 12 lacs.
17. What the criteria is to classify a housing loan for repairs in Centres
with population below 10 lakh
Maximum cost of dwelling unit
Rs 44 lacs and Maximum Loan Rs 10 lacs.
18. What is the criteria to classify
loan to Govt Agency as PSL for construction of houses for slum dwellers?
Bank loans to any governmental
agency for construction of dwelling units or for slum clearance and
rehabilitation of slum dwellers subject to dwelling units with carpet area of
not more than 60 sq. m.
19. What is the criteria to classify
loan for setting up social infrastructure like schools etc as PSL ?
Loans up to a limit of ₹8 crore
per borrower for setting up schools, drinking water facilities and sanitation
facilities including construction/refurbishment of household toilets and water
improvements at household level, etc.
20. What is the criteria to classify
loan to other than individuals for renewable energy as PSL ?
Bank loans up to a limit of ₹35
crore to borrowers for renewable energy based power generators and for
renewable energy based public utilities, viz., street lighting systems, remote
village electrification etc., will be eligible for priority sector
classification.
21. What is the criteria to classify
loan to individual households for renewable energy as PSL ?
For individual households, the
loan limit will be ₹10 lakh per borrower.
22. What is the criteria to classify
loan for building health care facilities in Tier II to Tier VI centres as PSL ?
Loans up to a limit of ₹12 crore
per borrower for building health care facilities in Tier II to Tier VI centres.
23. What is the purpose of classification
of centres into different tiers ?
In the vast expanse of India,
cities emerge as vibrant hubs of commerce, culture, and opportunity. To
comprehend and navigate this diverse urban landscape, the Indian government has
classified cities into four distinct tiers: Tier I, II, III, and IV. These
classifications serve as valuable indicators, shedding light on factors such as
population size, infrastructure development, economic growth, and quality of
life.
24. What are Tier I cities ?
Tier I Cities: Thriving Urban
Centres
Tier I cities in India
represent the epitome of urban development, offering a wealth of opportunities
and amenities. Here are some notable Tier I cities in India, including
Bengaluru, Delhi, Chennai, Hyderabad, Mumbai,
Pune, Kolkata, and Ahmedabad. These cities serve as major economic,
commercial, and cultural hubs, drawing both national and international
attention
Tier II Cities: Emerging Urban
Centres
Tier II cities in India are
witnessing rapid growth and urbanisation, presenting promising opportunities
for development. These Tier II cities are experiencing significant economic and
infrastructural advancements, attracting investments and fostering business
growth.
26. What are Tier III cities ?
Tier III Cities: Growing Urban
Centres
Tier III cities in India are
emerging as significant centres of growth and development. These cities are
witnessing rapid urbanisation and are experiencing advancements in
infrastructure, industry, and services.
27. What are Tier IV cities ?
Tier IV Cities: Developing
Urban Centres
Tier IV cities in India encompass
smaller urban centres and towns that are gradually experiencing growth and
development. These cities may have more limited amenities compared to
higher-tier counterparts, but they offer unique opportunities and contribute to
the regional economy
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Next part will be shared on 5th
June 2025
Sekhar Pariti
+91 9440641014
posted by The Banking Tutor @ June 03, 2025
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