Archive · 19 Jan 2026
RBI Tightens Scrutiny on Priority Sector Loans via Securitisation
The Reserve Bank of India (RBI) has decided to make banks check more carefully the loans they buy through something called 'securitisation notes'.
These loans are meant for special sectors like farming, small businesses, and housing.
Banks will now have to rely on reports from independent auditors and also do their own checks to make sure these loans are really for the priority sectors.
The RBI has also said that banks cannot charge extra fees on small loans up to ₹50,000.
This is to make sure that banks are lending money correctly and fairly to the people and businesses that need it the most.
Banks must verify the priority sector status of loans purchased via securitisation notes using external auditors' certifications and sample checks.
Investments in securitisation notes representing loans to priority sectors (except 'others') are eligible for classification under respective categories, subject to conditions.
Loans against gold jewellery originated by NBFCs are not eligible for priority sector status.
No loan-related charges can be levied on priority sector loans up to ₹50,000, with the limit applicable per member for self-help groups.
Bank credit to housing finance companies for on-lending for individual dwelling units or slum rehabilitation is eligible for priority sector lending classification, subject to a ₹20 lakh per borrower limit.
- Who
- Reserve Bank of India (RBI) and banks
- What
- Tightening scrutiny on priority sector loans purchased via securitisation notes
- When
- January 19, 2026
- Where
- India
- Why
- To ensure the quality and accuracy of priority sector lending
- Priority Sector Loans
- Loans to specific sectors like agriculture, small enterprises, and housing
- Securitisation Notes
- Financial instruments representing loans to priority sectors
- External Auditors' Certification
- Verification of priority sector status by independent auditors
- Sample Checks
- Banks' internal or external auditors' verification of loan portfolios
- Loan Charges
- No charges on priority sector loans up to ₹50,000
- Self-Help Groups
- Loan limit of ₹50,000 per member, not per group
- Housing Finance Companies
- Eligible for PSL classification with a loan limit of ₹20 lakh per borrower
