The Reserve Bank of India on Thursday, November 5, released five sets of draft Directions on priority sector lending (PSL), one for each kind of bank — commercial banks, small finance banks, local area banks, regional rural banks and urban co-operative banks — the central bank said in press release 2026-2027/1447. The drafts are part of the RBI's ongoing exercise to consolidate instructions issued over the years into separate, cleaner Directions for each type of regulated entity.

Source: Reserve Bank of India, via Wirony

Comments on the drafts can be sent until November 26, 2026, through the 'Connect 2 Regulate' section of the RBI website or by email. The RBI said instructions that have been left out of the consolidated drafts will be repealed once the final Directions are issued, and that this will be notified separately. Until then, the Priority Sector Lending Directions, 2025 — in force since April 1, 2025 and amended three times this year — remain the operative rulebook.

Source: Reserve Bank of India, via Wirony

What the commercial-bank draft proposes

The draft Directions for commercial banks propose that loans for agriculture infrastructure and for food and agro-processing activities qualify as priority-sector lending up to an aggregate sanctioned limit of Rs 100 crore per borrower, The Fox Daily reported from the draft text. The same draft proposes raising the eligible limit for individual education loans to Rs 25 lakh, allowing loans of up to Rs 2.5 lakh per borrower to individuals engaged exclusively in allied agricultural activities, and monitoring banks' compliance with PSL targets on a calendar-quarter basis. The RBI's own press release does not list the substantive changes, so the full picture will emerge as banks and experts compare each draft line by line with the current text.

Source: The Fox Daily

Why priority sector lending matters

Priority sector lending is the system under which banks must direct a fixed share of their credit to sectors the market might otherwise under-serve — agriculture, micro, small and medium enterprises, export credit, education, housing, social infrastructure, renewable energy and weaker sections. Under the current Directions, the total PSL target is 40% of adjusted net bank credit for domestic and large foreign banks, 75% for regional rural banks, and 60% each for small finance banks and urban co-operative banks. Home loans qualify up to Rs 50 lakh in the largest metro centres, with lower caps elsewhere.

Source: Reserve Bank of India, via Wirony

The release of bank-type-wise drafts was also noted in the day's official-affairs roundups, which recorded that separate draft Directions covering PSL targets and classification have been issued for each type of regulated entity and that comments can be submitted until November 26 through the RBI website or by email.

Source: Current Affairs, November 5, 2026