Do bank loans to start-ups count as priority sector lending in India?
Yes, up to ₹50 crore per start-up, with start-up as defined by the Ministry of Commerce and Industry. The loan sits in the category that fits the business: agriculture and allied services, MSME if the start-up meets the MSME definition, or the Others category for start-ups outside both.
Three places a start-up loan can sit
- Agriculture, ancillary services: loans up to ₹50 crore to start-ups engaged in agriculture and allied services (para 9.3).
- MSME: loans up to ₹50 crore to start-ups that conform to the MSME definition (para 10). All bank loans to MSMEs already qualify, so Udyam registration is what the bank will check.
- Others: loans up to ₹50 crore to start-ups in activities other than agriculture or MSME (para 16).
What defines a start-up here
The Directions use the definition set by the Ministry of Commerce and Industry, not a separate RBI test. Ask your bank which recognition document it wants on file, and keep it with your loan papers.
MSME thresholds to check
Under the notification of 21 March 2025, a micro enterprise has up to ₹2.5 crore in plant and machinery and ₹10 crore turnover, a small enterprise up to ₹25 crore and ₹100 crore, and a medium enterprise up to ₹125 crore and ₹500 crore.
What it does for you
A loan that counts towards a bank's priority sector target is one the bank is keen to make. It does not by itself mean a lower rate or a smaller collateral demand.
What Senseible does here
Senseible gives a climate or hardware start-up a bill-based energy and emissions record that lenders and investors can trace, without a consultant building it by hand.
- Udyam registration for bank loans
- Do all MSME loans count as priority sector
- Carbon data investors ask start-ups for
Sources: RBI, Master Directions (Priority Sector Lending, Targets and Classification) Directions, 2025, updated 11 September 2026: paras 9.3, 10 and 16, RBI, Master Direction, Lending to Micro, Small and Medium Enterprises (MSME) Sector, updated 9 February 2026: para 2.1 (MSME definition under S.O. 1364(E), 21 March 2025)
Last reviewed 2026-10-24.