2013
Q. 76
Set A
Economy
Banking
Priority Sector Lending by banks in India constitutes the lending to
Smart Elimination
Priority means helping people who need it most. Farmers and small businesses need help. So, banks must lend to them.
Answer Key & Explanation
Answer: DThe correct answer is Option D.
Explanation: Priority Sector Lending (PSL) mandates banks to lend a certain portion of their funds (40% for domestic scheduled commercial banks) to specific sectors crucial for development but credit-starved. Categories include:
- Agriculture (Farm credit, infrastructure).
- Micro, Small and Medium Enterprises (MSMEs).
- Weaker Sections (SC/ST, small farmers, SHGs).
- Export Credit, Education, Housing, Renewable Energy, Social Infrastructure.
Therefore, All of the above are correct.
Value Addition
- Targets: Domestic Banks (40%), Foreign Banks < 20 branches (40%), RRBs/SFBs (75%).
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Difficulty Assessment
easy
Foundational question based on core concepts.