What happened
The Reserve Bank of India (RBI) has released draft Directions on Priority Sector Lending (PSL) for public comment, according to a press release dated 5 November 2026. Priority sector lending refers to the lending that banks are expected to direct to sectors the regulator has designated as priority areas.
The RBI said it reviewed its existing PSL guidelines as part of a wider effort to consolidate instructions issued over time. It plans to issue Directions separately for each type of regulated entity.
Five drafts have been published, each titled “Priority Sector Lending – Targets and Classification” Directions, 2026, for:
- Commercial banks
- Small finance banks
- Local area banks
- Regional rural banks
- Urban co-operative banks
The press release does not set out the contents of the targets or classification in its text. Those details sit in the draft documents hosted on the RBI website.
How to give feedback
Comments must reach the RBI on or before 26 November 2026. There are two routes: the “Connect 2 Regulate” section of the RBI website, using the link next to each document, or e-mail with the subject line “Feedback on” followed by the full name of the draft Direction, including the type of regulated entity.
What it means for you
The drafts are not yet final, so nothing changes for borrowers or depositors today. Banks, industry bodies and other interested parties can respond before the deadline, and the final Directions will follow once the RBI has considered the feedback.
The RBI also said that any existing instructions not carried into the consolidated drafts will be repealed after the Directions are issued. That repeal will be notified separately.
Background
The RBI regulates different kinds of lenders under different rulebooks. For a broader look at how it oversees the largest category, see our explainer on commercial banks in India and how RBI regulates them.
