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RBI/FIDD/2024-25/128
Master Directions FIDD.CO.PSD.BC.13/04.09.001/2024-25
March 24, 2025
(Updated as on January 19, 2026)
The Chairman / Managing Director/
Chief Executive Officer
All Commercial Banks including Regional Rural Banks,
Small Finance Banks, Local Area Banks and
Primary (Urban) Co-operative Banks other than Salary Earners’ Banks
Madam/Dear Sir,
Master Directions - Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025
The Reserve Bank of India has, from time to time, issued a number of instructions/ guidelines to banks relating to Priority Sector Lending (PSL). The Master Directions enclosed incorporate the updated instructions/guidelines on the subject.
Yours faithfully,
(Nisha Nambiar)
Chief General Manager-in-Charge
| Para No. | Particulars |
|---|---|
| CHAPTER – I PRELIMINARY | |
| 1. | Short Title and Commencement |
| 2. | Applicability |
| 3. | Purpose |
| 4. | Definitions/Clarifications |
| CHAPTER – II CATEGORIES AND TARGETS UNDER PRIORITY SECTOR | |
| 5. | Categories under Priority Sector |
| 6. | Computation of Adjusted Net Bank Credit |
| 7. | Targets/Sub-targets for Priority Sector |
| 8. | Adjustments for weights in PSL Achievement |
| CHAPTER – III DESCRIPTION OF ELIGIBLE CATEGORIES UNDER PRIORITY SECTOR | |
| 9. | Agriculture |
| 10. | Micro, Small and Medium Enterprises |
| 11. | Export Credit |
| 12. | Education |
| 13. | Housing |
| 14. | Social Infrastructure |
| 15. | Renewable Energy |
| 16. | Others |
| 17. | Weaker Sections |
| CHAPTER – IV MISCELLANEOUS | |
| 18. | Investments by Banks in Securitisation Notes |
| 19. | Transfer of Assets through Direct Assignment/Outright Purchase |
| 20. | Inter Bank Participation Certificates |
| 21. | Priority Sector Lending Certificates |
| 22. | Bank loans to MFIs (NBFC-MFIs, Societies, Trusts, etc.) for On-Lending |
| 23. | Bank loans to NBFCs for On-Lending |
| 24. | Bank loans to HFCs for On-Lending |
| 24A | Bank loans to NCDC for on-lending |
| 25. | Cap on On-Lending |
| 26. | Co-lending by Banks and NBFCs to priority sector |
| 27. | PSL eligibility for COVID-19 measures |
| 28. | Monitoring of Priority Sector Lending Targets |
| 29. | Non-achievement of Priority Sector Targets |
| 30. | Common guidelines for Priority Sector Loans |
| ANNEX – I A: List of Districts with comparatively high PSL Credit | |
| ANNEX – I B: List of Districts with comparatively low PSL Credit | |
| ANNEX – II: Indicative list of eligible activities under Agriculture Infrastructure and Ancillary activities | |
| ANNEX – III: Indicative list of Permissible Activities under Food Processing Sector as shared by MoFPI | |
| ANNEX – IIIA: Priority Sector Lending Certificates - Scheme | |
| ANNEX – IV: COVID-19 measures - PSL treatment | |
| ANNEX-V: Priority Sector achievement - Calculation of shortfall/excess | |
| APPENDIX – List of Circulars Consolidated |
In exercise of the powers conferred by Sections 21 and 35A read with Section 56 of the Banking Regulation Act, 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.
PRELIMINARY
The provisions of these Directions shall, unless otherwise provided, apply to every Commercial Bank [including Regional Rural Bank (RRB), Small Finance Bank (SFB), Local Area Bank (LAB)] and Primary (Urban) Co-operative Bank (UCB) other than Salary Earners’ Bank.
These Directions are issued with a view to delineating a framework for ensuring adequate flow of credit from the banking system to the sectors of the economy which are crucial for their contribution to socio-economic development, with focus on specific segments whose credit needs remain underserved despite being credit worthy.
CATEGORIES AND TARGETS UNDER PRIORITY SECTOR
The categories under priority sector are as follows:
Agriculture
Micro, Small and Medium Enterprises
Export Credit
Education
Housing
Social Infrastructure
Renewable Energy
Others
The details of eligible activities under the above categories are specified in Chapter III.
6.1 For the purpose of priority sector lending, ANBC shall be computed as follows:
| Bank Credit in India [as prescribed in item No.VI of Form `A’ under Section 42(2) of the RBI Act, 1934] | I |
|---|---|
| Bills rediscounted with RBI and other approved Financial Institutions | II |
| Net Bank Credit (NBC)* | III(I-II) |
| Outstanding Deposits under RIDF and other eligible funds with NABARD, NHB, SIDBI and MUDRA Ltd in lieu of non-achievement of priority sector lending targets/sub-targets + outstanding PSLCs | IV |
| Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable housing as per [Reserve Bank of India (Resource Raising Norms) Directions, 2025 as applicable to Commercial Banks and Small Finance Banks]$^2$ | V |
| Advances extended in India against the incremental FCNR (B)/NRE deposits, qualifying for exemption from CRR/SLR requirements, as per the Reserve Bank’s circulars DBOD.No.Ret.BC.36/12.01.001/2013-14 dated August 14, 2013 read with DBOD.No.Ret.BC.93/12.01.001/2013-14 dated January 31, 2014, DBOD mailbox clarification issued on February 6, 2014 and UBD.BPD.(PCB).CIR.No.5/13.01.000/2013-14 dated August 27, 2013 read with UBD.BPD.(PCB).Cir.No.72/13.01.000/ 2013-14 dated June 11, 2014.$^3$ | VI |
| Investments made by public sector banks in the Recapitalization Bonds floated by Government of India | VII |
| Other investments eligible to be treated as priority sector (e.g. investments in securitisation notes) | VIII |
| Bonds/debentures in Non-SLR categories under HTM category | IX |
| For UCBs: Investments made after August 30, 2007 in permitted non SLR bonds held under ‘Held to Maturity’ (HTM) category | X |
| ANBC (Other than UCBs) III + IV- (V+VI+VII) +VIII + IX | |
| ANBC for UCBs III + IV - VI + X |
