RBI trims priority sector lending target for small finance banks from FY26; what borrowers should know
The decision marks a shift from the earlier mandate, which required SFBs to dedicate 75% of their lending towards sectors classified under PSL. Of this, 40% had to be mandatorily allocated to specific sub-sectors like agriculture, micro-enterprises, education, housing, and others, while the remaining 35% could be channelled flexibly into any PSL sub-sectors where the