Reserve Bank Of India Issues Revised Guidelines On Priority Sector Lending

BACKGROUND

The Reserve Bank of India (RBI) on 04 September 2020 released the revised Master Direction – Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions 2020 (Revised PSL Guidelines).

The RBI has revised the erstwhile priority sector lending guidelines with a view to align them with evolving national priorities and to foster inclusive development. The Revised PSL Guidelines are aimed at achieving deeper credit penetration in a multi-level manner and shall aid smaller and credit deficient businesses.

KEY HIGHLGHTS OF THE REVISED PSL GUIDELINES

• Objectives: The objectives of the Revised PSL Guidelines is to achieve greater credit penetration and liquidity in rural, weaker, smaller and credit deficient businesses while augmenting funding opportunities for companies impacted by the global coronavirus induced pandemic. It is an effort to divert liquidity towards new areas and sectors which need credit boosts for growth