Loans to startups will now qualify as priority sector lending (PSL) under new central bank guidelines, which are also aimed at boosting credit flow to backward districts, renewable energy projects and healthcare. Under the new Reserve Bank of India guidelines, loans of as much as ₹50 crore to startups, as defined by the commerce ministry, engaged in agriculture and allied services will be considered priority sector credit. Startups in other segments too shall benefit if the ministry tags them so. Under new PSL norms, higher weightage will also be assigned to fresh priority sector loans in districts with a low flow of such credit. “From FY22 onwards, a higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than ₹6,000), and lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than ₹25,000),” RBI said.

(Live Mint)