In India, what percentage is set as the Priority Sector Lending (PSL) goal for Small Finance Banks (SFBs)?

General Knowledge Indian Economy Difficulty: Medium
Choose an option
  • A
    50%
  • B
    60%
  • C
    65%
  • D
    75%
  • E
    80%

Answer

Correct Answer: 75%

Explanation

### Concept & Fact Check This question assesses knowledge of Priority Sector Lending (PSL) guidelines formulated by the RBI, specifically the differentiated targets for specialized banking entities. ### Step-by-Step Solution * **Given:** Identify the PSL target percentage for Small Finance Banks (SFBs). * **Fact Check:** According to RBI regulations, Small Finance Banks are designed to further financial inclusion. To align with this core mandate, they are required to extend 75% of their Adjusted Net Bank Credit (ANBC) to sectors classified as priority sectors (like agriculture, MSMEs, etc.). * **Conclusion:** The PSL mandate for SFBs is 75%. ### Exam Strategy & Shortcut Remember that specialized inclusive entities like Small Finance Banks (SFBs) and Regional Rural Banks (RRBs) have a much higher PSL target (75%) compared to the standard commercial bank target (40%). ### Common Pitfall Confusing the target for Small Finance Banks (75%) with the standard target for domestic scheduled commercial banks, which is set significantly lower at 40%. ### Final Answer Therefore, the correct answer is **75%**.
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