Module: | Capital Adequacy, Basel Norms & Monetary Policy
Q1: Consider the following statements regarding the Overall and Sectoral Priority Sector Lending (PSL) Target Percentages:
1. Regional Rural Banks are mandated to achieve a 75% overall priority sector target, while Small Finance Banks now have a revised target of 60% of ANBC or CEOBE, whichever is higher.
2. The Agriculture sector target is uniformly set at 18% of ANBC, within which a strict 10% sub-target is exclusively prescribed for Small and Marginal Farmers.
3. Primary (Urban) Co-operative Banks must achieve an overall priority sector lending target of exactly 60% of ANBC or CEOBE.
4. Domestic Commercial Banks must achieve a Micro Enterprises sub-target of 10% and a Weaker Sections sub-target of 15% of ANBC.
Which of the statements given above is/are correct?
2. The Agriculture sector target is uniformly set at 18% of ANBC, within which a strict 10% sub-target is exclusively prescribed for Small and Marginal Farmers.
3. Primary (Urban) Co-operative Banks must achieve an overall priority sector lending target of exactly 60% of ANBC or CEOBE.
4. Domestic Commercial Banks must achieve a Micro Enterprises sub-target of 10% and a Weaker Sections sub-target of 15% of ANBC.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statement 1 is correct: As per the June 2025 RBI revisions, Small Finance Banks (SFBs) now have a reduced overall PSL target of 60%, while Regional Rural Banks (RRBs) remain at 75%. Statement 4 is incorrect: Domestic Commercial Banks have a Micro Enterprises sub-target of 7.5% and a Weaker Sections sub-target of 12% of ANBC.
The 15% Weaker Sections target is specifically applicable only to RRBs.
Statements 2 and 3 accurately reflect the Master Direction statutory limits, including the 18% agriculture target with a strict 10% SMF sub-target, and the 60% overall target for UCBs.
The 15% Weaker Sections target is specifically applicable only to RRBs.
Statements 2 and 3 accurately reflect the Master Direction statutory limits, including the 18% agriculture target with a strict 10% SMF sub-target, and the 60% overall target for UCBs.