What changed
RBI updated the district lists for PSL weight adjustments, raising the per capita PSL threshold for higher weight (125%) from below ₹6,000 to below ₹9,000, and for lower weight (90%) from above ₹25,000 to above ₹42,000. These lists are now valid until FY2026-27. Additionally, the MSME definition reference was clarified, and UCBs' PSL reporting requirement was shifted from the old format to the new Master Direction on Filing of Supervisory Returns.
What it means for you
Banks will need to recalibrate their PSL lending strategies to target the new high-weight districts (per capita PSL < ₹9,000) for maximum credit benefit, while avoiding overexposure in low-weight districts (per capita PSL > ₹42,000). UCBs must update their reporting processes to comply with the new supervisory return format. The revised thresholds reflect RBI's ongoing effort to channel credit to underserved regions.
What you must do
- Update internal PSL district classification lists with the new Annex IA and IB districts effective FY2024-25.
- Adjust branch-level PSL targets to prioritize lending in districts with per capita PSL below ₹9,000 to avail 125% weight.
- Ensure UCBs transition PSL data reporting to the format specified at Sl. No. 61 of Annex III of the MD on FSR.
- Review MSME lending policies to align with the referenced Master Direction on MSME lending for clarity.
Who it affects
All commercial banks including RRBs, SFBs, LABs, and UCBs (other than Salary Earners’ Banks), PSL strategy and credit planning teams, UCB compliance and reporting departments, Branch managers in high- and low-PSL districts
What are the new per capita PSL thresholds for weight adjustments?
From FY2024-25, districts with per capita PSL below ₹9,000 get 125% weight, and those above ₹42,000 get 90% weight. Districts in between retain 100% weight.
How long are the updated district lists valid?
The revised lists are valid until FY2026-27, after which RBI will review them again.
What changed for UCBs regarding PSL reporting?
UCBs no longer need to submit Statement I and II to DoS regional offices. Instead, they must report PSL data using the format at Sl. No. 61 of Annex III of the Master Direction on Filing of Supervisory Returns (2024).