Priority Sector Lending

The government has eased norms under the microfinance credit guarantee scheme to boost fund flow to smaller lenders as utilisation of the ₹20,000-crore corpus remains low

State Bank of India has proposed granting priority sector status to all infrastructure loans or excluding them from ANBC calculations to encourage higher infrastructure investment

The revised framework formalises block-level credit planning, strengthens Lead District Manager offices and sharpens accountability across banking committees

The day's opinion page analyses priority sector lending reform, AI use in courts, the fiscal cost of freebies, youth activism, and a book on luck and self-help

In 2025-26, micro and small enterprises, for the first time, overtook agriculture as the single-largest component of PSL

A report by the Economic Advisory Council to the Prime Minister has flagged sharp regional imbalances in priority sector lending and called for a more equity-focused PSL framework

The EAC-PM has urged a review of India's priority sector lending norms, recommending a sharper focus on social equity and credit access for vulnerable groups

The meeting will be chaired by M Nagaraju, Secretary, Department of Financial Services (DFS), Ministry of Finance

The increase has been primarily driven by strengthened priority sector lending (PSL) norms, targeted government initiatives, and increased digitalisation

RBI cuts priority sector lending target for Small Finance Banks from 75 to 60 per cent starting FY26, easing compliance burden but offering limited short-term profit

Augurs well for banks with relatively lower organic PSL generation

Bank stocks today: HDFC Bank, AU SFB, Bajaj Finance, Bajaj Finserv, and Axis Bank shares were ruling higher in trade on Tuesday, March 25

The credit potential for the priority sector lending in Jharkhand has been projected at Rs 88,303 crore for the next fiscal, an increase of about 64 per cent from the current financial year, an official said on Saturday. It was fixed at Rs 54,008.31 crore for the year 2024-25. Priority sector lending (PSL) is a policy tool aimed at ensuring that key sectors crucial to the nation's development receive adequate financial support. Mandated by the Reserve Bank of India (RBI), PSL obligates banks to allocate a specified proportion of their loans to sectors such as agriculture, education, housing, and small industries. "The credit potential for the priority sector in the state has been projected at Rs 88303.77 crore for the year 2025-26, as against Rs 54,008.31 crore for the year 2024-25, showing an increase of 63.50 per cent," the official said. Earlier, Jharkhand Finance Minister Radha Krishna Kishore launched the state Focus paper 2025-26 emphasising the need for sustainable agricult

The official further said that the RBI only partially restored this classification to the extent of Rs. 20 lakh per borrower. Hence, NBFCs funding to MSEs is now restricted

Industry body CII has proposed reforms in India's Priority Sector Lending (PSL) framework, suggesting inclusion of emerging sectors and high-impact sectors like digital infrastructure, green initiatives, healthcare, and innovative manufacturing. Arguing that current Development Finance Institutions (DFIs) like SIDBI and NaBFID (National Bank for Financing Infrastructure and Development) have their roles cut out as they have earmarked sectors to finance, the chamber also suggested setting up of a high level committee to look at the revision of PSL norms and explore the need for any new DFIs to cater to some of the new and emerging sectors. Priority Sector Lending is a policy tool aimed at ensuring that key sectors crucial to the nation's development receive adequate financial support. Mandated by the Reserve Bank of India (RBI), PSL obligates banks to allocate a specified proportion of their loans to sectors such as agriculture, education, housing, and small industries. The framework

The rating agency also affirmed Yes Bank's "Ba3" long-term (LT) foreign currency (FC) and local currency (LC) bank deposit ratings

In a notification last week, RBI said the lists of districts have been updated after a review. These lists will remain valid until FY 2026-27

Company aims for strategic adjustments to benefit from the anticipated softening of interest rates

Against the aggregate credit flow of Rs 3.75 trillion in FY24, the advances of Rs 5.73 trillion will reflect a year-on-year (Y-o-Y) growth of 52 per cent

The move will reduce the cost of finance and also promote and accelerate the penetration of EVs in the country