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Consider the following statements regarding Priority Sector Lending (PSL) 1. At present, all domestic scheduled commercial banks and all foreign banks are required to meet a target of 40 per cent of their Adjusted Net Bank Credit (ANBC) for Priority Sector Lending 2. Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) are required to meet a target of 75 per cent towards PSL Which of the above statements is correct?

Consider the following statements regarding Priority Sector Lending (PSL) 1. At present, all domestic scheduled commercial banks and all foreign banks are required to meet a target of 40 per cent of their Adjusted Net Bank Credit (ANBC) for Priority Sector Lending 2. Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) are required to meet a target of 75 per cent towards PSL Which of the above statements is correct? Correct Answer 2 only

The correct answer is 2 only

  • In terms of Reserve Bank of India (RBI) guidelines on Priority Sector Lending (PSL) a target of 40 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposures (OBE), whichever is higher, as of preceding March 31st, has been mandated for lending to the priority sector by domestic scheduled commercial banks and foreign banks with 20 branches and above. Hence, Statement 1 is not correct.
  • Within this, sub-targets of 18% of ANBC or OBE whichever is higher, as of preceding March 31st is for Agriculture and 10% ANBC or OBE whichever is higher, as of preceding March 31st is for weaker sections which include, among others, persons from SCs/ STs. RBI prescribes PSL targets bank-wise and not state-wise.
  • RRBs and SFBs are required to meet a target of 75 per cent towards PSL.

Related Questions

Which of the following statements are true in context of scheduled banks?
1. All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks.
2. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks.
3. Scheduled Commercial Banks in India are categorized into five different groups - SBI, Nationalised Banks, Regional Rural Banks, Foreign Banks and Other Indian Scheduled Commercial Banks in the private sector.
4. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban Co-operative Banks.
Which of the following statements regarding Regional Rural Banks (RRB) in India is/are correct? I) RRBs are sponsored by Commercial Banks. II) Regional Rural Banks (RRBs) were established in 1975. III) The area of operation of the RRBs is limited to a few districts in a State.
The following sentences have been given in a jumbled manner. Un-jumble the sentences and answer the option which describes the order of sentences in a correct manner.  A. India's government is in talks with foreign lenders to provide as much as $14.5 billion in credit to millions of its small firms, two officials said, in a sign, the country's banking system may not be robust enough to do the job on its own B. India's micro, small and medium enterprise(MSME) ministry is discussing the proposal to pull in foreign banks with the country's ministry of finance, which will make a final call. C. The push for foreign loans comes on the heels of the Indian government's announcement earlier this month that it plans to borrow about 700 billion rupees by issuing overseas sovereign bonds. D. The government is in discussions with multiple foreign lenders, including Germany's state-owned development bank KfW Group, the World Bank and some Canadian institutions to extend lines of credit to small enterprises E. One official said that the government plans to source up to 1 trillion Indian rupees of loans from foreign institutions because Indian banks were not in a position to provide enough capital for the small business sector, which is seen as critical to job creation.
The question given below consists of a statement, followed by three arguments I, II and III. You have to decide which of the arguments is/are ‘strong’ arguments is/are ‘weak’ arguments and accordingly choose your answer from the alternatives given below each question. Statement: India's burgeoning shadow finance sector is likely to face a shake-up after defaults at one major lender battered the nation's financial markets in the past week and reinforced worries about credit risk. Industry officials and experts say they expect Indian regulators to cancel the licences of as many as 1,500 smaller non-banking finance companies because they don't have adequate capital, and to also make it more difficult for new applicants to get approval. Which of the following argument(s) stated support(s) the given fact? Arguments: I. Better capitalised and more conservatively run finance firms are likely to swallow up an increasing number of smaller rivals. That could make it difficult for many small borrowers to get loans, especially in the countryside where two-thirds of India's 1.3 billion people live and put the brakes on a surge in private consumption with a knock-on effect on growth.  II. The shadow banking sector now comprises more than 11,400 firms with a combined balance-sheet worth 22.1 trillion rupees ($304 billion) and is less strictly regulated than banks. It has been attracting new investors, particularly as the nation's banks have had to slow their lending as they seek to work through $150 billion of stressed assets.  III. Nearly 11,000 of India's NBFCs are small and medium-sized businesses with an asset base of less than 5 billion rupees. But the top 400, many of which are backed by banks and finance companies, control about 90 percent of the assets under management.
Re-arrange the following sentences into a meaningful paragraph. (A) comes into effect from today. The bank's savings account rate was 3.5 per cent during March 2003 to May 2011 for all savings bank account customers (B) The bank's decision comes two days ahead of RBI's monetary policy meet and is likely to trigger (C) with deposits of above Rs 1 crore, it said in a statement. The two-tier savings bank account interest rate (D) to 3.5 per cent, lowest in six years, a decision that will impact 90 per cent of its customers (E) The country's largest lender however will continue to pay 4 per cent interest on savings bank accounts (F) SBI today cut interest rate on savings bank account deposits up to Rs 1 crore by 0.5 per cent (G) rate war among peers. SBI's savings bank account base is of around Rs 9 lakh crore.
ANBC is the net bank credit plus investments made by banks in non-SLR bonds held in the held-to-maturity category or credit equivalent amount of off-balance-sheet exposure, whichever is higher. What does ‘C’ stand-in ANBC?
Consider the following statements: 1. In terms of short-term credit delivery to the agriculture sector, District Central Cooperative Banks (DCCBs) deliver more credit in comparison to Scheduled Commercial Banks and Regional Rural Banks. 2. One of the most important functions of DCCBs is to provide funds to the Primary Agricultural Credit Societies. Which of the statements given above is/are correct?
Which of the following statement/s is/are correct?
1. Payment bank cannot issue credit cards.
2. There is a limit on maximum balance of individual customer in payment bank.
3. SLR requirements for payment banks and small banks is less than commercial banks.
4. Priority sector lending up to 40% is mandatory for both private banks and small banks.
What is the purpose of setting up of Small Finance Banks (SFBs) in India? 1. To supply credit to small business units 2. To supply credit to small and marginal farmers 3. To encourage young entrepreneurs to set up business particularly in rural areas. Select the correct answer using the code given below:
Consider the following statements about Regional Rural Banks. 1. RRBs are financial institutions that ensure adequate credit for agriculture and other rural sectors. 2. It was set up on the recommendations of the Narasimham Working Group (1975) 3. “Prathama Grameen Bank” was the first RRB. Which of the above statements is/are correct?