To improve credit supply to small exporters, the Reserve Bank of India (RBI) on Friday increased the loan sanctions limit qualifying as priority sector lending by banks to Rs 40 crore per borrower.
The earlier limit was set at Rs 25 crore per borrower.
The RBI has also decided to remove the existing criteria of 'units having a turnover of up to Rs 100 crore' as part of the changes.
The move comes at a time when the government and the central bank are taking steps to push growth in the economy that has dipped to a 6-year low. Last week, the finance ministry declared a number of measures for exporters.
With regard to the above changes made on Priority Sector Lending, the Central Bank said that the existing guidelines for domestic scheduled commercial banks to classify 'Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher' under PSL will continue to be applicable.
"There is no change in the present instructions in respect of foreign banks," it added.