Priority sector lending norms...

THE OVERALL CAP on on-lending to NBFCs/HFCs/NCDC remains at 5% of the previous year’s PSL.

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"The latest revisions to the PSL framework is a shift towards simplification, transparency, and stronger governance. By reducing the PSL requirement for SFBs the regulator has eased operational pressures on these institutions without diluting their developmental mandate," said Sanjay Agarwal, senior director, CareEdge Ratings.

The inclusion of NCDC as an eligible participant broadens the market for PSL certificates and finally brings the cooperative sector into the mainstream of priority sector intermediation, he said. The new requirement for external auditor certification is an important measure, that ensures that priority sector benefits are not claimed twice for the same asset—a governance gap that has long needed tightening, he added.