New RBI Guidelines for Priority Sector Loans

By NRI Realty News Desk · January 22, 2026

Direct finance to corporate bodies for agriculture and related
activities has been hiked from Rs. 20 lakh to Rs. 1 crore, under
the priority sector lending category as per the RBI’s latest
announcement on May 1, 2007.

Home loans upto Rs. 20 lakh, as against Rs. 15 lakh would also
come under the priority sector category, and these revised norms
would be applicable with immediate effect.

The targets set for priority sector advances will be related
to ANBC, or adjusted net bank credit or credit corresponding
to off-balance sheet exposure (OBE), whichever is more, at the
end of the previous fiscal year, March 31.

NRI deposits, such
as the FCNR (B) and NRNR will not be used to settle commitments
for priority sector lending.
Current investments of banks in non-SLR bonds in the HTM (held
to maturity) category will not be taken into account for computing
ANBC upto March 31, 2010, though any new investments in non-SLR
bonds in the HTM group will be considered to establish targets
for priority sector advances.

As per the new norms, the outstandings placed with NABARD and
SIDBI for not being able to meet the PSL norms for agriculture
and small and medium enterprises will henceforth be categorized
as indirect finance under PSL upto March 2010.

New deposits will
not be clubbed so, as per the RBI announcement.
A slight reprieve in the home loan sector has been given by the
RBI, with upto Rs. 20 lakh loans qualifying as a Priority Sector
Lending.

In addition, loans for repair of damaged homes upto
Rs. 1 lakh in rural and semi-urban locations, and upto Rs. 2
lakh in metros and urban areas would also be disbursed as priority
sector advances.