Module: General Practice
Q15: As per the RBI Priority Sector Lending (PSL) guidelines (updated and applicable in 2026), which of the following statements regarding the targets for Domestic Commercial Banks is INCORRECT?
✅ Correct Answer: D
Option D is the correct answer because it is the incorrect statement.
The rule is that Foreign Banks with less than 20 branches have an overall PSL target of 40 percent of ANBC, but they are NOT required to meet the specific sub-targets for Agriculture or Micro Enterprises.
They can achieve their 40 percent target through any combination of priority sectors (Exports, MSME, etc.). For Domestic Commercial Banks, the targets are: Total PSL at 40 percent of ANBC, Micro Enterprises at 7.5 percent of ANBC, and Weak Sections at 12 percent of ANBC.
Medium Enterprises are part of the overall Priority Sector but do not have a specific standalone percentage target like Micro Enterprises do.
The rule is that Foreign Banks with less than 20 branches have an overall PSL target of 40 percent of ANBC, but they are NOT required to meet the specific sub-targets for Agriculture or Micro Enterprises.
They can achieve their 40 percent target through any combination of priority sectors (Exports, MSME, etc.). For Domestic Commercial Banks, the targets are: Total PSL at 40 percent of ANBC, Micro Enterprises at 7.5 percent of ANBC, and Weak Sections at 12 percent of ANBC.
Medium Enterprises are part of the overall Priority Sector but do not have a specific standalone percentage target like Micro Enterprises do.