Page 49 - Banking Finance April 2023

ARTICLE

S. No. Year, Month & Event
Year, Date
1 28-Mar-07 Tradable Priority Sector Lending Certificates is proposed for the first time. It is called 'social
credits'
2 31-Dec-07 Tradable credits are proposed for Insurance for the first time. It is called 'micro insurance
credits'
3 Jan-08 Tradable 'micro insurance credits' is cited in a USAID (US Agency for International
Development) document
4 7-Apr-08 High-Level Committee on Financial Sector Reforms recommends the introduction of 'social
credits' (calls it Priority Sector Lending Certificates in its draft report)
5 12-Sep-08 High-Level Committee on Financial Sector Reforms recommends the introduction of 'social
credits' (calls it Priority Sector Lending Certificates in its final report)
6 2010 Reserve Bank of India sets-up a Working Group to examine the issues involved in the
introduction of PSLCs and make suitable recommendations.
7 21-Feb-12 Reserve Bank of India constituted M.V. Nair Committee recommends "allowing non-tradable
priority sector lending certificates (PSLCs) on pilot basis with domestic scheduled commercial
banks, foreign banks and regional rural banks as market players".
8 28-Feb-15 Government of India Ministry of Finance Department of Financial Services proposes
introduction of Priority Sector Lending Certificates.
9 1-Mar-15 Reserve Bank of India Internal Working Group recommends introduction of priority sector
lending certificates (PSLCs) which will enable banks to meet their PSL requirements even
while leveraging their comparative advantage in lending.
10 23-Apr-15 Reserve Bank of India says in its Notification on "Priority Sector Lending - Targets and
Classification" that "The outstanding priority sector lending certificates (after the guidelines
are issued in this regard by the Reserve Bank of India) bought by the banks will be eligible
for classification under respective categories of priority sector provided the assets are
originated by banks, and are eligible to be classified as priority sector advances and fulfill
the Reserve Bank of India guidelines on priority sector lending certificates."
11 7-Apr-16 Reserve Bank of India issues Notification on "Priority Sector Lending Certificates" and issues
instructions on trading in PSLCs.
12 7-Apr-16 Reserve Bank of India Deputy Governor S.S. Mundra launches portal for trading in Priority
Sector Lending Certificates.
13 24-May-16 Reserve Bank of India issues Frequently Asked Questions (Updated on 22 Nov 2016)

Types: 3. PSLC Micro Enterprises: Priority Sector Lending
Certificates for micro enterprises lending sub-target.
As priority sector lending has sub-targets in addition to an
overall target there are types of Priority Sector Lending
4. PSLC General: Priority Sector Lending Certificates
Certificates (PSLCs). The four types of Priority Sector Lending
Certificates are: corresponding to the overall priority sector lending
1. PSLC Agriculture: Priority Sector Lending Certificates for target.
agriculture lending sub-target.
Additional types of Priority Sector Lending Certificates would
2. PSLC SF/MF: Priority Sector Lending Certificates for
be required for other lending sub-targets.
small and marginal Farmers lending sub-target.

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