FinMin prods banks to speed up rollout of Pradhan Mantri Surya Ghar scheme

In a move to accelerate the rollout of the Pradhan Mantri Surya Ghar Muft Bijli Yojana (PMSGMBY), the Union finance ministry has directed banks to use the National Portal for the scheme as the single source for consumer validation, installation verification, and site feasibility assessment, doing away with all physical verification that consumes lots of time, according to a senior government official.

 

PMSGMBY is a solar energy scheme for both rural and urban households.

 

“A digital-only approach should be adopted as the default, eliminating the need for any physical interactions. It is recommended that the full subsidy tranche be disbursed to vendors based on their performance ratings. In terms of product reforms, mechanisms should be introduced to support applicants without a Credit Information Bureau (India) Limited (CIBIL) score,” said the official.

 

The source further added that a new financial product, in the form of a working capital instrument, should be developed specifically for vendors, with efforts to encourage adoption of this product by private sector banks.

 

“To support this transition, renewable finance obligations should be explored and integrated, alongside an expansion of Priority Sector Lending (PSL) and other supportive policy tools. At the ground level, emphasis should be placed on field activities such as technical and product training down to the branch level, consumer awareness programs, the setting of branch-level targets, and active monitoring through State Level Bankers’ Committees (SLBCs) and District Level Bankers’ Committees (DLBCs),” the official added.

 

The PMSGMBY aims to support the installation of rooftop solar systems across 10 million households in India. Under the scheme, a standard loan product linked to the repo rate plus 50 basis points (Repo+50 bps) is being offered, which is collateral-free, for amounts up to ₹2 lakh. As per the latest data, 4.1 million applications have been received, out of which around 1.1 million installations have been completed. Approximately, 375,000 loan applications have been submitted, with around 2 lakh loans sanctioned. 

 

Under the PMSGMBY, the subsidy is being directly credited to the applicant’s savings bank account by the Ministry of New and Renewable Energy (MNRE) through the Public Financial Management System (PFMS) portal, leading to the withdrawal of the subsidy amount by the applicant, a banker said.

 

“However, several technical challenges have been observed, such as One-Time Passwords (OTPs) are either not being received or are delayed on the Pradhan Mantri Surya Ghar Yojana (PMSGY) portal, the loan option is sometimes unavailable even after the vendor’s acceptance, and distribution company (Discom) data is not being fetched properly on the Jan Samarth portal,” the banker added, requesting anonymity.

 

The banker further said that to address these issues, a new functionality should be introduced to allow applicants to change their bank name before the final submission, along with a final confirmation popup to verify the selected bank and branch details before proceeding.

 

All applications are processed through the National Portal, which is integrated with the Jan Samarth platform — a unified portal for credit-linked government schemes. Notably, over 75 per cent of applications are for loans up to ₹2 lakh, with a total of ₹4,600 crore sanctioned under the scheme.

 

The consumer’s average contribution is about ₹15,000, and the vendor receives the subsidy in two tranches: 70 per cent initially, and 30 per cent later. However, compliance involves steps such as a branch visit, site visit, and submission of additional documents. The scheme carries a significant financing potential, estimated at ₹2 trillion, highlighting a major opportunity for banks and financial institutions.