How do Priority Sector Lending (PS

RBI differentiates PSL requirements for foreign banks based on their branch network in India: • Foreign banks with 20 or more branches → Must comply with the same PSL targets as domestic commercial banks, which includes agriculture, MSMEs, weaker sections, etc. • Foreign banks with fewer than 20 branches → Are given flexibility. They can allocate up to 32% of their PSL requirement to export credit, unlike their larger counterparts. • This differentiation recognizes the limited physical presence of smaller foreign banks in rural/semi-urban areas, while still ensuring their contribution to priority sectors.