The Reserve Bank of India has released the Second Amendment to its Directions on Priority Sector Lending, indicating adjustments to targets and classifications. This amendment relates to the import and export of foreign currency and its implications on the financial sector.
RBI's Second Amendment on Priority Sector Lending
On August 7, 2026, the Reserve Bank of India (RBI) issued the Second Amendment Directions concerning Priority Sector Lending (PSL). This amendment was influenced by statements made by the RBI Governor on June 5, 2026, and subsequent communications regarding the swap facility for Foreign Currency Non-Resident (FCNR) deposits.
The amendment aims to enhance the actual execution of PSL norms by introducing a US Dollar-Rupee swap facility intended for fresh FCNR deposits. The RBI aims to ensure that banks have adequate liquidity to meet the requirements of priority sector borrowers.
Legal practitioners in financial services must be aware that these changes could significantly impact banks' lending strategies and obligation to adhere to the new guidelines, as failure to comply may attract regulatory scrutiny.
Citations
- Reserve Bank of India (Priority Sector Lending – Targets and Classification) Second Amendment Directions (2026)