2026, Vol. 7, Issue 1, Part A
Empowerment of weaker sections through priority sector lending: A literature review with special reference private sector banks in India
Author(s): Meghashree GS and G Sudarsana Reddy
Abstract: Priority Sector Lending (PSL) is one of the policy tools developed by the Reserve Bank of India in order to achieve inclusive growth by securing sufficient credit supply to lagging sectors of the economy like agriculture, micro and small and medium enterprises, and weaker members of society. Although the major contribution to the implementation of PSL has always been made by the public sector banks, the banks in the private sector have started playing a major role in the post-liberalization period, using technology and novel methods of delivering their services, and using alternative methods of credit evaluation. This paper will critically examine the available literature on the role of the private sector banks in Priority Sector Lending in particular its contribution to the empowerment of the weaker sections in India. The approach to research taken in the paper is conceptual and descriptive, which is founded solely on secondary research, which includes scholarly journals, reports of the Reserve Bank of India, policy documents, bank publications. The review summarizes important results concerning sectoral allocation, the outreach approach, and the regulatory compliance, and the problems that private banks encounter when meeting PSL requirements. Through the analysis, it is possible to see that the performance in the case of the PSL in the private sector has been enhanced due to digital lending, partnerships, and Priority Sector Lending Certificate, but the issues of genuine outreach, risk-aversion, and dependence on indirect lending mechanisms remain. The paper identifies the necessity of more powerful policy incentives, greater financial literacy programs, and impact-driven models of PSL. The results provide useful information to the policy-makers, banking practitioners and research practitioners who require to enhance the efficiency of PSL in sustainable financial inclusion.
DOI: 10.22271/27084515.2026.v7.i1a.948
Pages: 15-20 | Views: 95 | Downloads: 40
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How to cite this article:
Meghashree GS, G Sudarsana Reddy. Empowerment of weaker sections through priority sector lending: A literature review with special reference private sector banks in India. Asian J Manage Commerce 2026;7(1):15-20. DOI: 10.22271/27084515.2026.v7.i1a.948
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