{"id":64726,"date":"2026-01-20T19:50:00","date_gmt":"2026-01-20T14:20:00","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=64726"},"modified":"2026-01-21T13:06:06","modified_gmt":"2026-01-21T07:36:06","slug":"rbi-strengthens-psl-oversight","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/20-01-2026\/rbi-strengthens-psl-oversight","title":{"rendered":"RBI Strengthens Priority Sector Lending (PSL) Oversight"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy&nbsp;<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>In News&nbsp;<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Reserve Bank of India (RBI) issued a comprehensive set of amendments to the <strong>Priority Sector Lending (PSL) \u2013 Targets and Classification Directions, 2025<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About Priority Sector Lending<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is an RBI-mandated policy that requires banks to direct a <strong>portion of their lending to key development sectors<\/strong> such as agriculture, education, housing, and small industries to support national growth.<\/li>\n\n\n\n<li>The latest revision enhances credit flow to key sectors such as Renewable Energy, Social Infrastructure, Education, and MSMEs, and strengthens support for vulnerable groups.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Features of the PSL Directions, 2025<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Enhanced Compliance Framework: <\/strong>Banks must secure external auditor certification (or CAG-empanelled auditors for entities like NCDC) to verify PSL claims and prevent double-counting of exposures between originating banks and intermediaries like NBFCs or cooperatives.<\/li>\n\n\n\n<li><strong>Revised targets for Small Finance Banks: <\/strong>The PSL requirement for Small Finance Banks (SFBs) has been rationalised from 75% to 60% of Adjusted Net Bank Credit (ANBC), reflecting a calibrated regulatory approach to balance inclusion goals with financial stability.<\/li>\n\n\n\n<li><strong>Inclusion of NCDC for rural credit:<\/strong> Loans extended by banks to the National Cooperative Development Corporation for on-lending to cooperative societies are now formally recognised as Priority Sector Lending, strengthening cooperative-based rural and agricultural credit.<\/li>\n\n\n\n<li><strong>Co-lending flexibility:<\/strong> Banks are permitted to enter co-lending arrangements with other financial intermediaries to meet PSL targets, promoting risk sharing and improved last-mile credit delivery.<\/li>\n\n\n\n<li><strong>Export credit as PSL: <\/strong>Export credit provided to agriculture and MSMEs can be treated as PSL, aligning priority sector policy with export promotion and employment generation objectives.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source :<\/strong><a href=\"https:\/\/www.financialexpress.com\/business\/banking-finance\/rbi-refines-priority-sector-lending-framework\/4112869\/\" target=\"_blank\" rel=\"noopener\"><strong>FE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>In News\u00a0<\/strong><\/p>\n<li class=\"ms-5\">The Reserve Bank of India (RBI) issued a comprehensive set of amendments to the Priority Sector Lending (PSL) \u2013 Targets and Classification Directions, 2025.<\/li>\n<p><\/p>\n<p><strong> About Priority Sector Lending <\/strong><\/p>\n<li class=\"ms-5\">It is an RBI-mandated policy that requires banks to direct a portion of their lending to key development sectors such as agriculture, education, housing, and small industries to support national growth. <\/li>\n<li class=\"ms-5\">The latest revision enhances credit flow to key sectors such as Renewable Energy, Social Infrastructure, Education, and MSMEs, and strengthens support for vulnerable groups. <\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/20-01-2026\/rbi-strengthens-psl-oversight\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-64726","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/64726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=64726"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/64726\/revisions"}],"predecessor-version":[{"id":64763,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/64726\/revisions\/64763"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=64726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=64726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=64726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}