Priority Sector Lending Norms

RBI, in June 2024, revised PSL guidelines to enhance credit flow to economically disadvantaged districts.

Key Changes in PSL Framework (Effective FY25)

  • Incentive-Based Weightage System
    • Districts with low credit availability (below Rs. 9,000 per person) – 125% weight for fresh PSL loans.
    • Districts with high credit availability (above Rs. 42,000 per person) – 90% weight for fresh PSL loans.
    • Other districts – Continue to have 100% weight to ensure balanced credit distribution.
  • All MSME loans will continue to qualify under PSL norms.

Understanding Priority Sector Lending (PSL)

  • PSL refers to sectors identified by the Government and RBI as crucial for economic development.
  • Objective: Direct credit ....
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