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Loan sanctions limit under priority sector lending by banks enhanced to Rs 40 crore per borrower

Updated: Sep 23, 2019 08:41:01am
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Loan sanctions limit under priority sector lending by banks enhanced to Rs 40 crore per borrower

Mumbai, Sept 23 (KNN) To boost credit supply to small exporters, the Reserve Bank of India (RBI) has enhanced the loan sanctions limit under priority sector lending by banks to Rs 40 crore per borrower. Earlier, the limit was capped at Rs 25 crore per borrower.

The RBI has also decided to remove the existing criteria of 'units having turnover of up to Rs 100 crore' as part of the changes.

The changes have been done "to boost credit to the export sector", the central bank said in the notification.

Priority sector lending is a mandatory requirement under which the banks are mandated to devote a portion of their advances to empower focused groups of the economy. All sectors put together, this adds up to 42 percent of the total lending for each bank.

Existing guidelines for domestic scheduled commercial banks to classify 'incremental export credit over corresponding date of the preceding year, upto 2 percent of adjusted net bank credit or credit equivalent amount of off- balance sheet exposure, whichever is higher' under PSL will continue to be applicable, the RBI said.

There is no change in the present instructions in respect of foreign banks, it added. (KNN Bureau)

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