Priority sector lending
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
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What is the overall Priority Sector Lending (PSL) target for domestic scheduled commercial banks?
Domestic scheduled commercial banks (excluding RRBs and SFBs) must lend 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher, to priority sectors.
What is the PSL target for Micro, Small and Medium Enterprises (MSME)?
No separate target; included in overall 40% PSL target.
What does ANBC stand for in the context of priority sector lending?
ANBC stands for Adjusted Net Bank Credit, which is the net bank credit adjusted for bills rediscounted with RBI and other approved financial institutions, used as the base for computing PSL targets.
Which RBI circular governs the current Priority Sector Lending guidelines?
Master Directions on Priority Sector Lending issued by RBI.
Which categories are included under the Priority Sector as per RBI guidelines?
Priority Sector includes Agriculture, Micro, Small and Medium Enterprises (MSMEs), Export Credit, Education, Housing, Social Infrastructure, Renewable Energy, and Other segments like weaker sections and distressed persons.
What is the maximum loan limit for Micro Enterprises under PSL?
Investment in plant and machinery does not exceed Rs 1 crore.
What is the PSL target specifically for Agriculture?
Banks must lend 18% of ANBC or CEOBE, whichever is higher, to Agriculture, with a sub-target of 10% for Small and Marginal Farmers within the agriculture category.
What is the PSL sub-target for Small and Marginal Farmers?
8% of ANBC or Credit Equivalent of Off-Balance Sheet Exposure.
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