To whom do priority sector loans point?

The correct answer is Loans being given to small-scale industries, agriculture, small businesses, etc.

Key Points

• The RBI mandates banks to lend a certain portion of their funds to specified sectors, like agriculture, Micro, Small, and Medium Enterprises (MSMEs), export credit, education, housing, social infrastructure, renewable energy among others.
• All scheduled commercial banks and foreign banks (with a sizable presence in India) are mandated to set aside 40% of their Adjusted Net Bank Credit (ANDC) for lending to these sectors.
• Regional rural banks, co-operative banks, and small finance banks have to allocate 75% of ANDC to PSL.
• The PSL guidelines were last reviewed for commercial banks in April 2015 and for Urban Co-operative Banks (UCBs) in May 2018.

Additional Information

• Repo Rate - It is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. 
• Reverse Repo rate - It is the rate at which the Reserve Bank of India borrows funds from the commercial banks in the country.
• Statutory Liquidity Ratio - It is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold, or other securities. 
• Cash Reserve Ratio - The percentage of cash required to be kept in reserves, vis-a-vis a bank's total deposits, is called the Cash Reserve Ratio.