MUMBAI:
RBI
has revised its priority sector guidelines to encourage banks to provide
small loans
in economically disadvantaged districts with low
average loan sizes
. The new norms discourage lending in districts with high average loan sizes.
Starting from FY25, more weight (125%) will be given to
fresh priority sector loans
in districts where the loan availability is low (less than Rs 9,000 per person).
In districts with high loan availability (more than Rs 42,000 per person), the loans will have a weight of 90%. With the exception of outlier districts with low credit availability and those with high loan sizes, all other districts will continue to have the current importance level of 100%.
"RBI has decided to rank districts based on
per capita credit flow
to the priority sector, and to establish an
incentive framework
for districts with lower
credit flow
and a
disincentive framework
for districts with higher priority sector credit flow," RBI said.
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