Module: | Capital Adequacy, Basel Norms & Monetary Policy
Q2: Consider the following statements regarding the PSL District Weightage Framework intended to address regional disparities:
1. An incentivized higher weight of 125% is assigned to incremental priority sector credit in identified districts where the per capita PSL flow is less than ₹9,000.
2. A disincentive lower weight of 90% is assigned to incremental priority sector credit in identified districts where the per capita PSL flow is strictly greater than ₹42,000.
3. The regional disparity weightage framework for incremental priority sector credit is valid only up to the financial year 2026-27, subject to review thereafter.
4. Regional Rural Banks and Primary (Urban) Co-operative Banks are entirely exempted from the district-wise weightage adjustments due to their currently limited area of operation.
Which of the statements given above is/are correct?
2. A disincentive lower weight of 90% is assigned to incremental priority sector credit in identified districts where the per capita PSL flow is strictly greater than ₹42,000.
3. The regional disparity weightage framework for incremental priority sector credit is valid only up to the financial year 2026-27, subject to review thereafter.
4. Regional Rural Banks and Primary (Urban) Co-operative Banks are entirely exempted from the district-wise weightage adjustments due to their currently limited area of operation.
Which of the statements given above is/are correct?
✅ Correct Answer: D
The correct answer is D. All statements are correct.
The RBI framework assigns an incentivized 125% weightage for incremental credit in credit-starved districts (per capita PSL ₹42,000). This framework is valid until FY 2026-27.
Niche banks with limited areas of operation, specifically Regional Rural Banks (RRBs), Primary (Urban) Co-operative Banks (UCBs), Local Area Banks (LABs), and Foreign Banks (Wholly Owned Subsidiaries), are explicitly exempted from these weightage adjustments.
The RBI framework assigns an incentivized 125% weightage for incremental credit in credit-starved districts (per capita PSL ₹42,000). This framework is valid until FY 2026-27.
Niche banks with limited areas of operation, specifically Regional Rural Banks (RRBs), Primary (Urban) Co-operative Banks (UCBs), Local Area Banks (LABs), and Foreign Banks (Wholly Owned Subsidiaries), are explicitly exempted from these weightage adjustments.