The Reserve Bank of India has issued draft directions on priority sector lending (PSL) that include an aggregate limit of Rs 100 crore per borrower for agriculture infrastructure loans. The draft was released on 5 November 2026 as part of a consolidation of existing PSL instructions, and comments are due by 26 November 2026.
The draft is addressed to regulated entities including commercial banks. Separate drafts have been issued for other bank categories such as small finance banks, local area banks and regional rural banks.
What Priority Sector Lending Limits Does the Draft Propose?
Based on press reports of the commercial banks draft, the following limits apply for classification as priority sector lending:
- Agriculture infrastructure: an aggregate sanctioned limit of Rs 100 crore per borrower from the banking system.
- Education: loans to individuals, including for vocational courses, up to Rs 25 lakh.
- Renewable energy: bank loans up to Rs 35 crore to renewable energy-based power generators and renewable energy-based public utilities, such as street lighting and remote village electrification. For individual households, the limit is Rs 10 lakh.
PSL categories covered in the consolidation include agriculture, MSMEs, exports, education, housing, social infrastructure and renewable energy. Some reports give different figures for farm-credit limits, so those are not listed here pending the full RBI text.
Who Is Affected?
Commercial banks and regional rural banks are named among the regulated entities. Borrowers in the covered categories, including farmers, agri-infrastructure borrowers, students, households and renewable energy borrowers, would be affected by the final rules.
Market and Trade Reaction
No market or industry reaction to the draft was found in the sources reviewed.
What Happens Next?
Stakeholders can send comments to the RBI until 26 November 2026. The reports reviewed do not give an effective date for the final directions.
Frequently Asked Questions
What is priority sector lending?
It is lending that banks must direct to sectors identified by the RBI as priority, such as agriculture, MSMEs, exports, education, housing, social infrastructure and renewable energy.
What is the proposed limit for agriculture infrastructure loans?
An aggregate sanctioned limit of Rs 100 crore per borrower from the banking system.
When is the deadline for comments?
26 November 2026.
Source: PTI (via The Week), 5 November 2026; Corporate Law Updates, November 2026.
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