Current · Source: Reserve Bank of India · RBI/2013-14/156 · issued 24 Jul 2013 · ~2 min read
Quick answerRBI has defined 'disbursement' for priority sector lending reporting: for cash credit/overdraft, it's the lower of debit sum minus charges or the sanctioned limit; for term loans, it's debit sum minus charges for the period.
The rule, in the simplest words
For cash‑credit or overdraft accounts, report the smaller of (the total money taken out minus interest/fees) or the approved limit (sanctioned limit) for that period.
For term‑loan accounts, report the total money taken out minus interest/fees for that period.
All scheduled commercial banks (except Regional Rural Banks) must use these exact formulas in their monthly and yearly priority‑sector‑lending reports.
Banks must update their reporting systems and train staff to calculate disbursements exactly as defined.
How it plays out — a real example
Ramesh, a priority‑sector lending officer in Mumbai, looks at the day's cash‑credit ledger, subtracts the interest and other charges, compares the result with the approved limit, and records the lower amount as the disbursement; for a farmer's term loan he simply subtracts the charges and records that figure, ensuring the monthly PSL report follows RBI's rule.
What changed
RBI clarified the definition of 'disbursement' for priority sector lending reporting in monthly and yearly formats. For cash credit/overdraft and similar running accounts, disbursement is the lower of debit summation minus interest/charges or the sanctioned limit for the period. For term loans, it is simply debit summation minus interest/charges for the period.
What it means for you
Banks must now use a uniform, precise formula to report disbursements, ensuring consistency across all scheduled commercial banks (excluding RRBs). This reduces ambiguity in PSL data and helps RBI monitor lending accurately. Lenders need to adjust their reporting systems to compute disbursements as per these definitions.
What you must do
Update your PSL reporting system to calculate disbursement for cash credit/OD as the lower of (debit sum minus charges) or sanctioned limit for each period.
For term loans, set disbursement as debit summation minus interest and other charges for the reporting period.
Train reporting staff on these definitions to ensure accurate monthly and yearly submissions.
Review existing PSL data to align with the new definition and correct any past discrepancies.
Who it affects
All scheduled commercial banks (excluding Regional Rural Banks), Priority sector lending reporting teams, Risk and compliance departments handling PSL data
❓ Common questions
Does this definition apply to all types of loans under priority sector lending?
The circular specifically covers cash credit/overdraft and similar running accounts, and term loans. Other loan types are not mentioned, so banks should follow existing guidelines for them.
What if the debit summation minus charges is higher than the sanctioned limit for a cash credit account?
In that case, the disbursement reported should be the sanctioned limit, as the definition uses the lower of the two values.
Are Regional Rural Banks exempt from this reporting definition?
Yes, the circular is addressed to all scheduled commercial banks excluding Regional Rural Banks, so RRBs are not required to follow this specific definition.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/156
RPCD.CO.Plan. BC 15/04.09.01/2013-14
July 24, 2013
The Chairman/ Managing Director/
Chief Executive Officer
[All scheduled commercial banks
(excluding Regional Rural Banks)]
Madam/Dear Sir,
Priority Sector Lending Reporting – Definition of “disbursement”
Please refer to the circular RPCD.CO.Plan. BC 56/04.09.01/2012-13 dated January 7, 2013 on Priority Sector Lending –Revised Reporting System.
2. Disbursement to be reported in the monthly and yearly reporting formats is defined as under:
(i) Cash credit/over draft account and running accounts of similar nature : Debit summation minus interest and other charges or sanctioned limit, whichever is lower for the particular period under consideration (monthly/quarterly/half yearly/yearly).
(ii) Term Loans : Debit summation minus interest and other charges for the particular period under consideration (monthly/quarterly/half yearly/yearly).
Yours faithfully,
(T V Rao)
Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/156 · issued 24 Jul 2013. The plain-English explanation above is BankPulse’s own independent summary.
Update your PSL reporting system to calculate disbursement for cash credit/OD as the lower of (debit sum minus charges) or sanctioned limit for each period.
📜 Compliance
For term loans, set disbursement as debit summation minus interest and other charges for the reporting period.
Train reporting staff on these definitions to ensure accurate monthly and yearly submissions.
Review existing PSL data to align with the new definition and correct any past discrepancies.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (All scheduled commercial banks (excluding Regional Rural Banks), Priority sector lending reporting teams, Risk and compliance departments handling PSL data), your first concrete step on “Priority Sector Lending: Disbursement Definition Clarified” is: “Update your PSL reporting system to calculate disbursement for cash credit/OD as the lower of (debit sum minus charges) or sanctioned limit for each period.” (RBI issued this 24 Jul 2013).
Action required: Update your PSL reporting system to calculate disbursement for cash credit/OD as the lower of (debit sum minus charges) or sanctioned limit for each period.
Action required: For term loans, set disbursement as debit summation minus interest and other charges for the reporting period.
Action required: Train reporting staff on these definitions to ensure accurate monthly and yearly submissions.
Action required: Review existing PSL data to align with the new definition and correct any past discrepancies.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8265&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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