RBI Priority Sector Lending Guidelines: 30 Questions & Answers

FCNR (B) and NRE term deposits are foreign currency and external rupee accounts maintained by Non-Resident Indians.

The National Cooperative Development Corporation (NCDC) is a statutory corporation that promotes cooperative development in agriculture, rural industries, and allied sectors

Priority Sector Lending is designed to ensure credit reaches marginalized and smaller borrowers affordably.

Adjusted Net Bank Credit (ANBC) is the primary denominator used to calculate a bank's priority sector lending quota.

The first audited balance sheet as on March 31st post commencement of operations

Priority Sector Lending Certificates (PSLCs) are tradable instruments that allow banks with a shortfall in their PSL targets to buy the "priority sector achievement" of banks that have over-performed, without transferring the actual loan asset risk

Education loans are a vital component of PSL, designed to ensure that meritorious students can access higher education and vocational training without facing credit starvation

Housing loans under PSL are strictly capped by both the loan size and the total asset cost to prevent banks from financing luxury real estate under the guise of social lending

Social Infrastructure refers to physical facilities that provide essential societal services.

The MSME sector (Micro, Small, and Medium Enterprises) is a major driver of employment.

Start-ups registered under the Ministry of Commerce and Industry are recognized as vital engines of innovation and job creation.

The "Weaker Sections" category is a broad umbrella under PSL that consolidates various marginalized borrower groups, ensuring a significant portion of total bank credit is directed toward deep financial inclusion

(A ₹100 loan counts as ₹125 towards the bank's target)

(A ₹100 loan counts as ₹100)

(A ₹100 loan counts as only ₹90)

"On-lending" refers to the practice where a bank provides a wholesale bulk loan to an NBFC, which the NBFC then breaks up into smaller retail loans for priority sector borrowers (like small shopkeepers or farmers

Farmers Producers Organisations (FPOs) are collectives formed by groups of individual farmers (usually small and marginal) to pool resources, achieve economies of scale in buying fertilizers, and negotiate better selling prices

100 crore

PMJDY is India's national mission for financial inclusion, providing basic savings bank deposit accounts to the unbanked.

TReDS (Trade Receivables Discounting System) is an electronic platform where MSMEs can auction their unpaid corporate invoices to banks at a discount to get immediate cash

PSLCs are digital certificates that allow banks to trade their priority sector achievements.

Self-Help Groups (SHGs) are informal associations of 10 to 20 local women who pool savings and take joint-liability loans to start micro-businesses.

Agricultural credit under PSL is designed to ensure food security.

(Bank's total ANBC is finalized at ₹100,000 Crore)

PM SVANidhi is a central sector scheme that provides ultra-small, collateral-free working capital loans (₹10,000, then ₹20,000, then ₹50,000) to street vendors to help them resume livelihoods post-economic shocks

Compressed Bio-Gas (CBG) is produced through the anaerobic decomposition of agricultural waste, cattle dung, and municipal solid waste.