RBI: PSL classification lapses limited to a few banks, not system-wide

The RBI has stated that recent issues flagged in priority sector lending classification at some large private banks are isolated cases and not a system-wide issue. The RBI strengthened PSL compliance norms and plans to issue revised instructions. HDFC Bank and ICICI Bank set aside additional provisions due to misclassification of agricultural loans as PSL. Axis Bank also set aside provisions in Q1FY26 following a similar RBI exercise. The RBI has comprehensively reviewed the Kisan Credit Card scheme to expand coverage, streamline operational aspects, and address emerging requirements. Revised guidelines are expected to consolidate guidelines relating to agriculture and allied activities.