Current · Source: Reserve Bank of India · RBI/2021-22/14 · issued 07 Apr 2021 · ~2 min read
Quick answerRBI has increased the PSL classification limit for loans against Negotiable Warehouse Receipts (NWRs) and electronic NWRs from ₹50 lakh to ₹75 lakh per borrower. This applies to both individual and corporate farmers, while loans against other warehouse receipts remain capped at ₹50 lakh.
The rule, in the simplest words
The maximum Priority Sector Lending (PSL) amount for loans using Negotiable Warehouse Receipts (NWRs) or electronic NWRs (eNWRs) is now ₹75 lakh per borrower, up from ₹50 lakh.
Loans that use other types of warehouse receipts (not NWR/eNWR) are still limited to ₹50 lakh per borrower.
Both individual farmers and corporate farmers (including Farmer Producer Organisations) can get the higher ₹75 lakh limit for NWR/eNWR loans.
Banks must change their internal PSL classification rules, train credit officers on the two different limits, and tell branch managers about the update.
How it plays out — a real example
Ramesh, a senior credit officer in Indore, receives a request from a farmer who wants to pledge an electronic NWR worth ₹70 lakh. He checks the new RBI rule, sees the loan fits within the ₹75 lakh limit, approves it as PSL‑eligible, and records the change in the branch’s loan system.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2021-22/14
FIDD.CO.Plan.BC.No.7/04.09.01/2021-22
April 7, 2021
The Chairman / Managing Director/
Chief Executive Officer
[All Commercial Banks including Regional Rural Banks,
Small Finance Banks, Local Area Banks and
Primary (Urban) Co-operative Banks other than Salary Earners’ Banks]
Dear Sir/Madam
Priority Sector Lending (PSL) – Increase in limits for bank lending against Negotiable Warehouse Receipts (NWRs) / electronic Negotiable Warehouse Receipts (eNWRs)
Please refer to the Statement on Developmental and Regulatory Policies dated April 7, 2021 , wherein Reserve Bank of India (RBI) had announced increase in loan limits for bank lending against NWRs/eNWRs.
2. In terms of paras 8.1 (vii) and 8.2 (b) of the “ Master Direction on Priority Sector Lending – Targets and Classification” dated September 4, 2020 , bank loans against pledge/ hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months are eligible for classification under PSL, subject to a limit up to ₹50 lakh per borrower.
3. With a view to ensure greater flow of credit to the farmers against pledge/hypothecation of agricultural produce, and to encourage use of NWR/eNWR issued by regulated warehouses as a preferred instrument for availing such finance by the farmers, it has been decided to enhance the PSL limit for loans against NWRs/eNWRs from ₹50 lakh to ₹75 lakh per borrower. The PSL limit backed by the warehouse receipts other than NWR/eNWR will continue to be ₹50 lakh per borrower.
4. Consequent to the above change, para 8.1(vii) and 8.2(b) of the Master Direction on Priority Sector Lending – Targets and Classification dated September 4, 2020 will stand modified as follows:
Para 8.1 - Farm Credit - Individual farmers
vii. Loans against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months subject to a limit up to ₹75 lakh against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.
Para 8.2 Farm Credit - Corporate farmers, Farmer Producer Organisations (FPOs)/(FPC) Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities
(b) Loans up to ₹75 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.
Yours faithfully
(Sonali Sen Gupta)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/14 · issued 07 Apr 2021. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the revised limits to branch managers and agricultural lending teams.
📜 Compliance
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.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (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), your first concrete step on “PSL limit for NWR/eNWR loans raised to ₹75 lakh” is: “Update internal PSL classification guidelines to reflect the new ₹75 lakh limit for NWR/eNWR loans.” (RBI issued this 07 Apr 2021).
Circular: RBI/2021-22/14 -- PSL limit for NWR/eNWR loans raised to ₹75 lakh
Issued: 07 Apr 2021
Action required: Update internal PSL classification guidelines to reflect the new ₹75 lakh limit for NWR/eNWR loans.
Action required: Train credit officers on the differential limits: ₹75 lakh for NWR/eNWR vs ₹50 lakh for other warehouse receipts.
Action required: Review existing loan portfolios to reclassify eligible NWR/eNWR loans up to ₹75 lakh under PSL.
Action required: Communicate the revised limits to branch managers and agricultural lending teams.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12068&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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