BLOG
RBI relaxes PSL norms to improve financial inclusion


Reserve Bank of India has rolled out revised Priority Sector Lending (PSL) guidelines, set to take effect from April 1, 2025, with the goal of improving access to credit. Key changes include;
- Increase in limit for home loans at ₹50 lakhs (for centres with population over 50 lakh), from earlier ₹35 lakh to ₹45 lakhs (centres with population between 10-50 lakhs) and from ₹25 lakh to ₹35 lakh (centres with population less than 10 lakh),
- increase in limit of loans for renewable projects from ₹30 crore to ₹35 crore,
- Explicit inclusion of individual members of JLG/ SHG,
- Apart from above other announcement includes introduction of non-corporate farmer limit of 14% within agri limit of 18% and defined interest rates based on shortfall.
In our view, relaxation in PSL norms will enhance financial inclusion through better accessibility to credit while banks with sizeable exposure to home loans (SBI, HDFC Bank) could remain minor beneficiaries. Given uncertain external environment, volatility in near term could not be ruled out. However, anticipation of a further 25 bps rate cut, continued infusion of liquidity to ensure transmission of rate cuts, steady domestic macro-economic performance is expected to push fundamental growth while reasonable valuation remains a tailwind. Thus, we continue to prefer large banks including Kotak Mahindra Bank, Axis Bank and HDFC Bank.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.

Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Podcasts


