​RBI Revises Priority Sector Lending Norms

On 21st June, 2024, the Reserve Bank of India (RBI) made changes to its priority sector guidelines with the aim of encouraging banks to provide small loans in economically disadvantaged districts that have low average loan sizes.

  • The revised norms, set to take effect from the fiscal year 2025-26, introduce a weighted approach based on the average loan sizes across districts.

Revised RBI Guidelines

  • The new norms discourage lending in districts with high average loan sizes.
  • Starting from FY25, more weight (125%) will be given to fresh priority sector loans in districts where the loan availability is low (less than Rs. 9,000 ....
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