RBI Revises Priority Sector Lending Norms for Small Finance Banks Effective FY 2025-26
| Key Aspect | Details |
|---|---|
| Announcement by | Reserve Bank of India (RBI) |
| Policy Revised | Priority Sector Lending (PSL) norms for Small Finance Banks (SFBs) |
| Effective From | Financial Year 2025-26 |
| Previous PSL Requirement | 75% of Adjusted Net Bank Credit (ANBC) (40% mandatory, 35% flexible) |
| Revised PSL Requirement | 60% of ANBC or CEOBE (40% mandatory, 20% flexible) |
| Mandatory Allocation | 40% of ANBC/CEOBE to specified PSL sub-sectors (agriculture, MSMEs, etc.) |
| Flexible Allocation | 20% of ANBC/CEOBE to any PSL sub-sector based on competitive advantage |
| Legal Basis | Section 22(1) of the Banking Regulation Act, 1949 |
| Objective | Enhancing credit efficiency, targeted lending, financial inclusion |
| Previous Guidelines | Issued on November 27, 2014, expanded via 'on-tap' licensing (Dec 5, 2019) |
| Impact | Reduced regulatory burden, strategic lending flexibility, sustained focus on financial inclusion |