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    Question

    Which of the following statements is INCORRECT regarding

    Priority Sector Lending (PSL)?
    A Loans to MSMEs up to a specified limit are classified under PSL. Correct Answer Incorrect Answer
    B Agriculture lending is a part of PSL. Correct Answer Incorrect Answer
    C Housing loans up to a certain limit are covered under PSL. Correct Answer Incorrect Answer
    D Bill factoring services under TReDS platform is considered as PSL. Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Factoring transactions under the TReDS platform are not treated as PSL exposure. RBI has clarified that although MSME finance is eligible for PSL, factoring services are excluded to avoid duplication and risk misclassification.

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