Clarification: As per extant guidelines, loans for Agriculture Infrastructure or loans for Food & Agro-processing activity are each subject to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system. In case aggregate exposure across the banking industry exceeds the limit of ₹100 crore, then total exposure will cease to be classified under PSL category. The sanctioned limit of ₹100 crore has to be ascertained facility-wise for a particular entity and is exclusive of the other borrowings of the entity for PSL / non-PSL purposes. However, it needs to be ensured that the bank has assessed and sanctioned separate limits for the specific purpose of Agriculture Infrastructure or Food & Agro Processing activities of the entity, for the loans to qualify as PSL. Banks should take a declaration from the borrower regarding loan/s sanctioned by any other bank/s for the same activity and also independently seek confirmation from those banks. In the scenario, where new sanction by the bank leads to overall limit across banks exceeding ₹100 crore, it will have to inform other banks about the same. Accordingly, all other banks will have to declassify the same from PSL.

Clarification : As per Annex-III of Master Directions on Priority Sector Lending, 2025 transportation is an eligible activity under indicative list of permissible activities under Food Processing Sector. However, while classifying any facility to transporters for purchasing commercial vehicles under “Food & Agro-processing” category, it needs to be ensured that the vehicles are used exclusively for transportation of food and agro-processed products or are types of vehicles specifically used for “Food & Agro-processing” e.g. cold storage trucks, vans etc. If the commercial vehicle is also used for transportation of products other than those related to food & agro processing, the facility shall not be eligible for classification under ‘Food & Agro-processing’ category. Such loans may, however, be classified under MSME, if the borrower is eligible for classification as MSME in terms of definition given in the Master Direction – Lending to Micro, Small & Medium Enterprises (MSME) Sector dated July 24, 2017 (as updated from time to time)

Clarification: While classifying any facility to transporters for purchasing commercial vehicles under “Agriculture Infrastructure” category, it needs to be ensured that the vehicle is used exclusively for activities that are ancillary to “Agriculture Infrastructure”. If the commercial vehicle is also used for other purposes, the facility shall not be eligible for classification under ‘Agriculture Infrastructure’. Such loans may, however, be classified under MSME, if the borrower is eligible for classification as MSME as per the definition given in the Master Direction – Lending to Micro, Small & Medium Enterprises (MSME) Sector dated July 24, 2017 (as updated from time to time)

Clarification: Export credit extended by banks to the agriculture and MSME sectors is eligible to be classified as priority sector lending under the respective categories viz, agriculture and MSME, without any upper limit.

Clarification: The outstanding value may exceed ₹25 lakh on account of accrued interest due to moratorium on repayment during the study period. Accordingly, the entire outstanding amount shall be reckoned for priority sector provided the sanctioned limit does not exceed ₹25 lakh.

Clarification: Housing loans to banks’ own employees are not eligible for classification under priority sector lending, irrespective of whether they are extended on commercial terms or at subsidised rates.

Clarification: Bank loans for above purposes can be classified under MSME, wherein no cap on credit has been prescribed. However, banks can classify such activities either under MSME or Social Infrastructure, and not both. It may be noted that for classification under Social Infrastructure, the associated cap on credit shall be applicable.

Clarification: For classification under ‘Weaker Sections’, the loans should first be eligible for classification under any of the eight PSL categories as per underlying activity.

Clarification: As per extant guidelines, SMF includes individuals, SHGs, JLGs, Farmers’ Producer Companies (FPC) and Co-operatives of farmers with the accompanying criteria of membership by number and land-holding. Therefore, loans to partnership firms/co-borrowers or any director of a company holding agriculture land upto 2 hectares are not eligible to be classified under the SMF category of PSL.

Clarification: As per extant guidelines, priority sector loans are eligible for classification as loans to minority communities as per the list notified by the GoI from time to time. The same may be read with Master Circular- Credit Facilities to Minority Communities which at para 2.2 states “In the case of a partnership firm, if the majority of the partners belong to one or the other of the specified minority communities, advances granted to such partnership firms may be treated as advances granted to minority communities. Further, if the majority beneficial ownership in a partnership firm belongs to the minority community, then such lending can be classified as advances to the specified communities. A company has a separate legal entity and hence advances granted to it cannot be classified as advances to the specified minority communities”