Banks’ priority lending growth slows in FY25

THE GROWTH IN priority sectorlending (PSL) for scheduled commercial banks slowed to 12% in FY25 from 16.9% a year ago, according to the Trend and Progress of Banking report, released by the Reserve Bank of India (RBI) on Monday.

- FE BUREAU

The moderation in growth was led by private banks, while public sector banks (PSBs) posted a marginal increase, it noted. However, all banks managed to achieved their PSL targets, the RBI said.

Currently, banks should lend 40% of their total credit to priority sectors, while the RBI revised total PSL target for small finance banks to 60% from 75%, effective April 1, 2025.