Banks seek priority sector tag for electric vehicle loans

TO BOOST ELECTRIC vehicle (EV) financing, banks have suggested that the government nudge the Reserve Bank of India (RBI) to grant the priority sector tag to retail EV loans and reduce the risk weightage on such loans, sources said.

- PRASANTA SAHU

In a meeting with government think tank Niti Aayog on Friday, banks, including State Bank of India and ICICI Bank, pitched for the inclusion of EV loans in banks' priority sector lending (PSL) obligations to increase lenders' risk appetite and credit flow to the emerging sector.

A reduction in risk weightage from 100% to a lower threshold would also free up banks' capital for other productive purposes, sources said.