What changed
The PSL limit for bank loans against NWRs/eNWRs has been enhanced from ₹50 lakh to ₹75 lakh per borrower. Loans against other warehouse receipts continue to have a ₹50 lakh limit. The change modifies paragraphs 8.1(vii) and 8.2(b) of the Master Direction on Priority Sector Lending dated September 4, 2020.
What it means for you
Banks can now extend higher PSL-eligible credit to farmers using NWRs/eNWRs, encouraging adoption of regulated warehouse receipts. This supports greater formal credit flow to agriculture without increasing risk, as NWRs/eNWRs are issued by regulated warehouses. Lenders should update their PSL classification systems and loan sanction limits accordingly.
What you must do
- Update internal PSL classification guidelines to reflect the new ₹75 lakh limit for NWR/eNWR loans.
- Train credit officers on the differential limits: ₹75 lakh for NWR/eNWR vs ₹50 lakh for other warehouse receipts.
- Review existing loan portfolios to reclassify eligible NWR/eNWR loans up to ₹75 lakh under PSL.
- Communicate the revised limits to branch managers and agricultural lending teams.
Who it affects
All commercial banks including RRBs, Small Finance Banks, Local Area Banks, and Primary Urban Co-operative Banks, Farmers (individual and corporate) using NWRs/eNWRs, Agricultural lending departments and credit risk teams
Does this change apply to all warehouse receipts or only NWRs/eNWRs?
Only loans against Negotiable Warehouse Receipts (NWRs) and electronic NWRs (eNWRs) benefit from the increased limit of ₹75 lakh. Loans against other warehouse receipts remain capped at ₹50 lakh per borrower.
What is the loan tenure requirement for PSL classification under this circular?
The loan must be for a period not exceeding 12 months, as per the existing Master Direction on Priority Sector Lending.