The Reserve Bank of India (RBI) has announced revision in priority sector lending guidelines on Thursday. Medium enterprises, social infrastructure and renewable energy will form part of priority sector, in addition to the existing categories, the central bank said.

For agriculture, the distinction between direct and indirect agriculture is dispensed with, the RBI said. A target of 8% of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, has been prescribed for small and marginal farmers within agriculture, to be achieved in a phased manner i.e., 7% by March 2016 and 8% by March 2017, the central bank said.

Bank loans to food and agro processing units will form part of agriculture, the RBI said.

For micro enterprises, a target of 7.5 percent of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, to be achieved in a phased manner i.e. 7% by March 2016 and 7.5% by March 2017.

The RBI said there is no change in the target of 10% of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, for weaker sections.

Foreign banks with 20 branches and above already have priority sector targets and sub-targets for agriculture and weaker sections, which are to be achieved by Mar. 31, 2018 as per the action plans submitted by them and approved by RBI. The sub-targets for small and marginal farmers and micro enterprises would be made applicable post 2018 after a review in 2017.

Foreign banks with less than 20 branches will move to total priority sector target of 40% of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, on par with other banks by 2019-20, and the sub-targets for these banks, if to be made applicable post 2020, would be decided in due course.

The RBI said, export credit upto 32% of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher, will be eligible as part of priority sector for foreign banks with less than 20 branches. For other banks, the incremental export credit over corresponding date of the preceding year will be reckoned upto 2% of ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher.

The loan limits for housing loans and MFI loans qualifying under priority sector have been revised, the central bank said.

The priority sector non-achievement will be assessed on quarterly average basis at the end of the respective year from 2016-17 onwards, instead of annual basis as at present. The revised guidelines are operational with immediate effect. The priority sector loans sanctioned under the guidelines issued prior to this date will continue to be classified under priority sector till repayment/maturity/renewal, the RBI said.