What happens if PSL targets are not met?
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What happens if PSL targets are not met?
PSL certificates allow banks sitting on surplus loans to a priority sector to sell certificates to banks that haven’t met their targets, pocketing a sizeable fee for this trade. The said loans however do not change hands.
What is the PSL target for small finance bank?
Priority Sector Lending – Small Finance Banks and RRBs – Target
| Categories | Target |
|---|---|
| Total Priority Sector | 75 per cent of Adjusted Net Bank Credit |
| Agriculture | 18 per cent of ANBC. Within the 18 per cent target for agriculture, a target of 8 percent of ANBC is prescribed for Small and Marginal Farmers. |
What is PSL category?
Introduction to Priority Sector Lending (PSL) Priority Sectors Lending is the role exercised by the RBI to banks, imploring them to dedicate funds for specific sectors of the economy like agriculture and allied activities, education and housing and food for the poorer population.
Do private banks follow PSL?
The banking sector failed to meet the priority-sector lending (PSL) targets overall, revealed data released by the Reserve Bank of India (RBI). While PSBs met their PSL target for agriculture of 18 per cent, private banks and foreign banks failed to meet the targets at 16.2 per cent and 16.7 per cent, respectively.
What is a PSL loan?
PSL Financing Program means a financing arrangement program established by any Loan Party with a financial institution or other Person pursuant to which such financial institution or other Person agrees to finance, in whole or in part, PSL Purchasers’ obligations under the PSLs, and which arrangement does not conflict …
Why priority sector is important?
Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors. This is essentially meant for an all round development of the economy as opposed to focusing only on the financial sector.
What is the PSL target for scheduled commercial banks?
Targets for scheduled commercial banks 40 per cent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. 18 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Is PSL applicable to cooperative banks?
UCBs have to reach the PSL target in phases — 45 per cent by March 2021 (from 40 per cent as at March-end 2020), 50 per cent by March 2022, 60 per cent by March 2023 and 75 per cent by March 2024.
What is non PSL?
Non-Priority Sector lending is the sector towards which financial institutions are always ready to lend credit. It attracts finance every time. It covers all the remaining sectors which are other than PSL.