Banking · Priority Sector Lending
If a bank in India exceeds its target for lending to Micro Enterprises under Priority Sector Lending (PSL), can the excess in the Micro Enterprise category be used to offset a shortfall in the Agriculture sub-target for avoiding penalty/deposits in RIDF?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1No, excess in Micro Enterprises can only offset Small Enterprise shortfalls.
- 2Yes, RBI permits a 5% margin of error across all sub-targets.
- 3No, mandatory sub-targets for Agriculture and Weaker Sections must be met independently.✓
- 4Yes, any excess in one priority sector sub-category can offset shortfall in any other sub-category.
Correct answer
No, mandatory sub-targets for Agriculture and Weaker Sections must be met independently.
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