The Reserve Bank of India (RBI) on January 19, 2026, issued the Reserve Bank of India (Priority Sector Lending – Targets and Classification) (Amendment) Directions, 2026, to further amend the Reserve Bank of India (Priority Sector Lending – Targets and Classification) Directions, 2025.
The following has been amended, namely: -
• The amendment updates the treatment of exemptions on issuance of long-term bonds for infrastructure and affordable housing in the computation of priority sector lending (PSL) targets for commercial banks and small finance banks, aligning with existing RBI resource-raising norms.
• A footnote has been added clarifying how incremental advances out of FCNR(B)/NRE deposit resources are to be calculated and capped for exclusion from Adjusted Net Bank Credit (ANBC) when computing PSL targets.
• Banks are now instructed to calculate the credit equivalent of off-balance sheet exposures (CEOBSE) using the RBI’s Large Exposures Framework and other relevant prudential norms and directions updated from time to time.
• The priority sector lending targets and sub-targets for different categories of banks (including commercial banks, foreign banks, RRBs, and SFBs) have been redrafted in the table to reflect updated percentages and sub-targets.
• A new paragraph (18A) was inserted to provide that banks may rely on external auditor certificates alongside internal checks to verify the priority sector status of underlying portfolios.
• A new Annex IIIA has been inserted to detail the PSLC scheme and how PSLCs can be used toward priority sector targets.
[Notification no. - RBI/FIDD/2025-26/196 FIDD.CO.PSD.BC.No.11/04.09.001/2025-26]
