Priority sector lending rules set for bank-specific consolidation
The Reserve Bank of India (RBI) proposes separate priority sector lending directions for five bank categories. Public comments are due by November 26, 2026; instructions omitted from the consolidated directions will be repealed upon issuance.
Five categories get separate drafts
The RBI has reviewed existing Priority Sector Lending (PSL) guidelines as part of its effort to consolidate instructions issued over time.
It proposes separate directions for commercial banks, small finance banks, local area banks, regional rural banks and urban co-operative banks.
Each of the five draft directions is dated 2026 and covers priority sector lending targets and classification for the relevant category of regulated entity.
The drafts are available on the RBI website for public comment.
Instructions excluded from the consolidated drafts will be repealed when the directions are issued, and the RBI will notify those repeals separately.
Two routes for feedback
Comments must reach the RBI on or before November 26, 2026.
Respondents can use the Connect 2 Regulate section of its website, following the corresponding hyperlink beside each hosted draft.
Alternatively, they can submit feedback by email, using a subject line that identifies the full name of the draft direction, including the regulated entity type.
Chief General Manager Brij Raj signed press release 2026-2027/1447, which invites comments on all five drafts.
Drafts are not final rules
The proposal separates the PSL framework by bank category rather than presenting a single consolidated direction.
The announcement does not specify changes to lending targets or classification criteria.
Repeal of omitted instructions depends on issuance of the directions.