Reserve Bank of India (RBI) classifies bank loans to National Cooperative Development Corporation (NCDC) as Priority Sector Lending (PSL)

Key facts

• The Reserve Bank of India (RBI), in consultation with the Government of India, has announced that loans sanctioned by banks to the National Cooperative Development Corporation (NCDC) for on-lending to cooperative societies are eligible for Priority Sector Lending (PSL) classification.
• This eligibility is applicable for loans sanctioned with effect from 19 January 2026.
• The classification applies to banks other than Regional Rural Banks (RRBs), Urban Cooperative Banks (UCBs), Small Finance Banks (SFBs), and Local Area Banks (LABs).
• These loans must be for purposes and activities as laid down in the Master Direction on Priority Sector Lending, 2025.
• The measure aims to strengthen the financial health, governance, and digital inclusion of cooperative banks while enhancing deposit security and credit availability.