Mumbai, Nov. 5 -- The Reserve Bank of India (RBI) has proposed allowing bank loans of up to Rs.100 crore per borrower for agriculture infrastructure and food and agro-processing activities to qualify as priority sector lending (PSL), in a move aimed at improving institutional credit flow to underserved sectors.

The proposal is part of the central bank's draft PSL directions released on Thursday.

Under the draft rules, loans for agriculture infrastructure will be eligible for PSL classification subject to an aggregate sanctioned limit of Rs.100 crore per borrower across the banking system. A similar limit has been proposed for food and agro-processing activities.

Banks will have to sanction separate loan limits for these activities, obt...