EV infrastructure may be included under priority sector lending
electric vehicle (EV) infrastructure within the priority sector lending category, a senior official said Saturday, a move that would come as a boost for the sector.
«We have received a representation to include EV infra in the priority sector. We will look at reworking the priority sector lending (PSL) requirements for banks,» the official said, adding that the issue will be discussed with the Reserve Bank of India (RBI). The power ministry has also written a letter to the Department of Financial Services in this regard, the official said.
According to RBI guidelines, it is mandatory for banks to extend 40% of their adjusted net bank credit to the priority sector.
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PSL currently includes seven sectors — agriculture, micro, small and medium enterprises, export credit, education, housing, social infrastructure and renewable energy.
The government wants to increase the proportion of EVs on Indian roads as part of efforts to meet its net zero target. It offers subsidies to manufacturers under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) programme.
Inclusion of EV infrastructure under PSL is expected to boost credit flow to the sector by providing a mandate for financial institutions.
According to a January 2022 Niti Aayog report, electric two- and three-wheelers, as well as four-wheelers for commercial use, represent favourable segments for inclusion in priority sector lending.
EV sales crossed 700,000 in the first half of 2023.
An earlier ET report had indicated that banks were pitching to include loans for electric vehicle infra and green hydrogen as part of priority sector lending.
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