Foreign banks under pressure from RBI on priority lending

Reserve Bank of India's has directed foreign banks to maintain at least 40% of their total advances to priority sector has put a lot of strain on the banks in question. As per the order, the banks which have more than 20 branches would have to increase their priority lending from 32% to 40%.

Priority sector lending (PSL) includes sectors like farm loans, loans allied agricultural activities like food processing, educational loans,  Currently HSBC, Standard Chartered, Citibank, and Royal Bank of Scotland are the banks which have 20 or more branches.

These banks have however shown asked the RBI to allow more liberal licensing policy which would enable them to increase their reach and meet the PSL targets. RBI has set a deadline of 2018 for the banks to meet the targets.