Priority Sector Lending (PSL) Explained
Priority Sector Lending (PSL) is an RBI requirement that banks direct a specified share of their lending to sectors considered important for inclusive growth.
Priority Sector Lending (PSL) is an RBI requirement that banks direct a specified share of their lending to sectors considered important for inclusive growth.
Covered sectors
Priority sectors include agriculture, micro, small and medium enterprises (MSMEs), education, housing, renewable energy and weaker sections of society.
Purpose
PSL ensures that credit reaches sectors and groups that might otherwise be underserved, supporting financial inclusion and balanced development.
Why it matters for UPSC
The PSL concept and its covered sectors are commonly tested banking and financial-inclusion facts.
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What is Priority Sector Lending?
An RBI requirement that banks lend a specified share of credit to priority sectors like agriculture and MSMEs.
Why is PSL important?
It ensures credit reaches underserved but economically important sectors and groups, supporting financial inclusion.