Small Finance Banks have been granted with a differentiated banking licence, which is related proportionately to their growth in their capital base. The policy clearly states that the Priority Sector Lending (PSL) of SFBs in total lending is continuously declining for the fourth consecutive year during FY 2021 and the Non priority sector lending accounts for more than 28% of the total loans as of March 2021 end.
A recent paper news on the meeting held by RBI with the Chiefs of SFBs is appended below.
PS: SFBs are expected to deply 75% of their credit in priority sectors, out of which 50% of loan released should be below Rs. 25 lakh each.
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