Bank Theory

Priority Sector Advances - Bank Theory Priority Sector Advances Applicability Priority Sector Lending (PSL) norms are applicable to all commercial banks (including foreign banks), Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and Urban Cooperative Banks (UCBs). The objective is to ensure that adequate credit is available to the vulnerable sectors of the economy. Targets/Sub-Targets for Priority Sector RBI has set the following overall and sub-targets for PSL: Total PSL: 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposure, whichever is higher. Agriculture: 18% of ANBC, out of which 8% for Small and Marginal Farmers. Micro Enterprises: 7.5% of ANBC. Weaker Sections: 12% of ANBC. Mathematical Illustration: If ANBC of a bank is ₹5000 crore, the targets will be: - Total PSL: 40% of 5000 = ₹2000 cr...