Consider the following statements regarding the Priority Sectors Lending: 1. Besides microfinance groups, individual farmers are also eligible to get credit under this arrangement. 2. Priority Sectors Lending certificates can be traded on RBI’s e-Kuber platform. 3. Priority Sectors Lending is the role exercised by the RBI to banks, imploring them to dedicate funds for specific sectors of the economy like agriculture and allied activities, education and housing and food for the poorer population. Which of the above statements is/are correct?

Solution

Priority Sectors Lending is the role exercised by the RBI to banks, imploring them to dedicate funds for specific sectors of the economy like agriculture and allied activities, education and housing and food for the poorer population. The goal of a PSL initiative is to provide credit to the weaker sections of the society, as opposed to funding only profitable sectors or spaces that are solely important to economic growth. All sectors considered as a priority are able to easily access financial support like apply for loans that the banks are required to allot at a lower interest rate.