Priority Sector means those sectors which the Government of India and Reserve Bank of India consider as important for the development of the basic needs of the country and are to be given priority over other sectors. The banks are mandated to encourage the growth of such sectors with adequate and timely credit.

The  target  given for  the  entire  PS is  40 percent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.  However there are sub categories  under each of  the  above  categories

 What are the  eligible  sectors?

  PS lending is  stated  to be  included  for  the  following  purposes  too:

• Bank loans up to a limit of Rs. 30 crore to borrowers for purposes like solar based power generators, biomass-based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities, viz., street lighting systems and remote village electrification etc.
• Gold loans given to farmers- 
• Of the  18%  credit to be  given to agriculture, small and  marginal farmers are  to be  given upto 10%
• Bank finance of up to Rs. 50 crore to start-ups,
• Loans to farmers both for installation of solar power plants for solarisation of grid-connected agriculture pumps,
•  Loans  for setting up compressed biogas (CBG) plants.
•  For  Health infra- limit has  been raised from Rs 5  cr to Rs 10 Cr
•  Renewable  energy from Rs 15 cr to Rs 30 Cr
• Loans  upto Rs  5  cr  for  setting up schools, drinking water/sanitation  facilities
• The revised PSL guidelines have been framed to address regional disparities in the flow of priority sector credit. Higher weightage has been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low. Also  to enable better credit penetration to credit deficient areas, increase the lending to small and marginal farmers and weaker sections, boost credit to renewable energy, and health infrastructure.

Accordingly, from FY 2021-22, a higher weight (125%) would be assigned to the incremental priority sector credit in the identified districts where the credit flow is comparatively lower (per capita PSL less than Rs. 6,000), and a lower weight (90%) would be assigned for incremental priority sector credit in the identified districts where the credit flow is comparatively higher (per capita PSL greater than Rs. 25,000).