PSL Reforms-2020: on RRB/SFB/UCB?

Question 1

What does PSL stand for?

Answer 1

Priority Sector Lending

Question 2

What is the general purpose of PSL reforms?

Answer 2

To ensure that banks direct credit towards specific sectors of the economy considered important for development.

Question 3

Which type of bank saw the biggest change in their PSL quota in 2020?

Answer 3

Urban Cooperative Banks (UCBs)

Question 4

Briefly explain how PSL quotas work.

Answer 4

Banks are required to direct a certain percentage of their lending towards sectors like agriculture, small businesses, education, etc.

Question 5

Name at least three sectors that fall under Priority Sector Lending.

Answer 5

Agriculture, small-scale industries, education, housing, export credit, etc.

Question 6

Why might PSL reforms be important?

Answer 6

They help ensure access to credit for sectors that might be underserved by traditional banking, contributing to balanced economic development.