- PSL is lending to sectors specified by RBI considered important for national development. - These sectors often include borrowers with limited collateral or volatile income streams (e.g., agriculture). - This can lead to higher delinquency rates and consequently higher NPAs in the PSL portfolio.
Priority sector lending by commercial banks ______
Asked in WBCS Main Paper 5 2021 · Topic: Money & Banking (Commercial Banking: Structure, Functions, and Recent Reforms in India)
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Answer: A. Raised the level of non productive assets (npa)
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