RBI releases draft PSL directions for public comments
In short
The Reserve Bank of India has put draft priority sector lending rules online for public comments.
The draft covers commercial banks, small finance banks, local area banks, regional rural banks and urban co-operative banks. It matters because the RBI is changing and combining old lending instructions into new directions.
What the reporting says
The Reserve Bank of India has placed draft directions on priority sector lending on its website for public comments. The central bank said it reviewed existing PSL guidelines and plans to issue RE-wise directions for commercial banks, small finance banks, local area banks, regional rural banks and urban co-operative banks. It also said instructions not included in the consolidated draft will be repealed after the directions are issued.
Why it matters
The RBI has begun a consultation on consolidated priority sector lending directions for multiple types of banks, including commercial banks and regional rural banks. The draft is part of a wider review of existing PSL instructions, and the central bank said older instructions not carried into the consolidated version will be repealed once the directions are issued. This is a policy step for lenders that rely on PSL compliance.