The full form of PSL bank is Priority Sector Lending bank.
While the abbreviation "PSL" most commonly refers to Priority Sector Lending, especially within the context of the Reserve Bank of India (RBI) and banking regulations in India, the term "PSL bank" is not a standard or officially recognized term. It is crucial to distinguish between the concept of Priority Sector Lending (PSL) and the existence of a bank specifically named or designated as a "PSL bank."
Here's a breakdown to clarify:
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Priority Sector Lending (PSL): This refers to a mandate given by the RBI to banks operating in India, requiring them to allocate a certain percentage of their Adjusted Net Bank Credit (ANBC) towards specific sectors of the economy that are considered important for development but may not receive adequate credit otherwise. These sectors typically include agriculture, micro, small and medium enterprises (MSMEs), education, housing, export credit, and others.
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"PSL bank": This term is not officially used or recognized by the RBI or any other regulatory body. There are no banks specifically named or designated as "PSL banks." Banks comply with PSL guidelines, but they are not categorized as such.
In essence, while all scheduled commercial banks in India (and some other financial institutions) are involved in priority sector lending to meet RBI mandates, there is no entity that is actually called a "PSL bank". The reference likely stems from the banks' obligations and activities related to Priority Sector Lending.
