[Solved] Which of the following statements about Priority Sector Lending (PSL) is INCORRECT? — Ans: Loans to large corporate enterprises are included under PSL | Financial Awareness

Financial Awareness - Risk, Stability & Emerging Finance

Which of the following statements about Priority Sector Lending (PSL) is INCORRECT?

ALoans to housing for economically weaker sections up to Rs. 35 lakh qualify under PSL

BLoans to large corporate enterprises are included under PSL

CLoans to non-corporate farmers up to Rs. 2 lakh are included under PSL

DExport credit to micro and small enterprises is part of PSL

Step-by-Step Solution

Step 1: Understand PSL inclusions and exclusions
Priority Sector Lending focuses on agriculture, MSMEs, housing for economically weaker sections, and export credit.
Step 2: Identify the incorrect statement
Loans to large corporate enterprises are excluded from Priority Sector Lending.
Step 3: Verify other statements
Housing loans for EWS/LIG up to Rs. 35 lakh qualify under PSL for metropolitan cities (subject to dwelling unit cost limits). Loans to non-corporate farmers up to Rs. 2 lakh and export credit to MSMEs are included.
Final Answer:
Loans to large corporate enterprises are included under PSL → Option B
Quick Check:
Large corporates are NOT part of PSL ✅

Quick Trick: PSL excludes large corporate enterprises.

Common Mistakes:

Using outdated Rs. 45 lakh housing limit instead of the PSL-specific Rs. 35 lakh limit for metropolitan cities.

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