Which of the following deposits are not considered under Priority Sector Lending (PSL) when forwarded by banks?

The correct answer is Deposits from Non-Banking Financial Companies (NBFCs).

In News

• RBI clarified that loans forwarded by banks using deposits from NBFCs do not qualify under PSL norms.

Key Points

• NBFC deposits do not contribute to Priority Sector Lending (PSL).
• PSL focuses on credit access for agriculture, MSMEs, and housing.
• Banks must comply with RBI’s PSL norms to ensure financial inclusion.
• NBFCs act as intermediaries and are not direct PSL lenders.

Additional Information

• PSL Targets
  • Banks must allocate 40% of Adjusted Net Bank Credit (ANBC) to PSL.
  • Includes categories like MSMEs, education, renewable energy.
  • Cooperative banks and RRBs follow similar PSL guidelines.