RBI’s January 2026 PSL Revisions: Compliance, ANBC and NCDC Loans
Why in the news
In January 2026 RBI updated PSL rules, tightening on-lending and reporting practices and matching them with prudential norms.
About PSL
Banks must lend a fixed portion of Adjusted Net Bank Credit (ANBC) to priority sectors: agriculture, MSMEs, education, housing, export credit and weaker sections, to promote inclusive growth.
Key changes
| Area | Change |
|---|---|
| On-lending | Auditor certification for claims routed via NBFCs, MFIs, HFCs and cooperatives, to stop double counting |
| Risk alignment | Matched with capital adequacy, concentration and Credit Risk Transfer norms |
| ANBC | Clearer handling of long-term bonds and FCNR(B)/NRE-linked advances |
| Off-balance sheet | Uniform norms for commercial banks, SFBs, cooperative banks |
| NCDC | Bank loans to National Cooperative Development Corporation for on-lending count as PSL, within caps |
| Small Finance Banks | Target lowered to about 60% of ANBC |
| Disclosure | Stricter timelines and formats |
Borrower protection
No service charges on small PSL loans such as SHG and JLG loans.
Exam angle
- PSL base: ANBC.
- New eligible route: NCDC.