Definition
Priority Sector Lending is a requirement where banks must lend a certain percentage of their loans to important sectors that support national development.
Purpose
It ensures areas like agriculture, small businesses, education, and housing receive fair access to credit.
How It Works
The Reserve Bank of India sets guidelines and targets for banks to meet Priority Sector Lending requirements.
Key Benefits
- Encourages balanced economic growth
- Supports weaker sections
- Helps in national development
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