 "Financial stocks trade mixed as RBI revises PSL norms; Nifty Bank tops 52K")
RBI revises PSL guidelines, bank stocks today: Most financial stocks, including banks, were edging higher in trade on Tuesday, March 25, 2025, after the Reserve Bank of India (RBI), on Monday, announced changes in the Priority Sector Lending (PSL) norms. The Nifty Bank index, for instance, surpassed the 52,000-mark in the intraday trade on the National Stock Exchange (NSE) today, hitting an intraday high of 52,058.55 (up 0.68 per cent).
The Nifty Private Bank, Nifty PSU Bank, and Nifty Financial Services indices, meanwhile, were up in the range of 0.25 per cent to 0.84 per cent at 10:00 AM. By comparison, the Nifty50 index was ruling 200 points (0.85 per cent) higher at 23,855 level.
Among individual stocks, HDFC Bank share price was trading 2.26 per cent higher at the time of writing this report, AU Small Finance Bank shares 0.7 per cent, and Kotak Mahindra Bank and Axis Bank 0.68 per cent each.
Among other financial stocks, Bajaj Finserv share price was 2.45 per cent higher, SBI Card shares 2 per cent, Bajaj Finance 0.6 per cent, and Cholamandalam Investment and Finance 0.44 per cent.
On the downside, some financial stocks saw profit booking from higher levels, including Shriram Finance, LIC Housing Finance, Muthoot Finance, Power Finance Corporation (PFC), and REC.
As per the latest revision in the PSL guidelines issued by the RBI, the central bank has allowed banks to categorise housing loans up to Rs 50 lakh for centres with population of over 5 million and above as priority sector, with the maximum cost of the dwelling unit at Rs 63 lakh. ALSO READ | UBS upgrades UltraTech, Ambuja, Dalmia to 'buy' on earnings upcycle in FY26
For centres with a population of more than 1 million and up to 5 million, home loans up to Rs 45 lakh with cost of dwelling unit at Rs 57 lakh would be classified as priority sector.
That apart, for renewable energy financing, the RBI has increased the bank loan limit to Rs 35 crore from Rs 30 crore for borrowers for RE-based power generators and RE-based public utilities like street lighting systems, remote village electrification, etc.
Furthermore, changes to education loans, and loans to weaker sections and women development have also been notified by the RBI. CLICK HERE FOR ALL THE CHANGES
The changes in the priority sector lending (PSL) guidelines will be effective from April 1, 2025.
According to analysts, the revised guidelines are a significant step forward, designed to help banks more effectively manage their PSL portfolios — an area where many institutions previously struggled to keep pace.
By expanding the scope of PSL-eligible borrowers and enhancing flexibility in lending limits across key sectors like housing, education, and renewable energy, they believe, the framework is poised to foster greater financial inclusion.
"We believe that these measures are incrementally positive for the sector as a whole, with banks like HDFC, ICICI, SBI, Axis, etc. being the largest beneficiaries of the same," said those at Motilal Oswal Financial Services.
ICICI Securities analysts added that increase in home loan limit will aid credit growth and achieve PSL target, supporting margins.