Indian banks set to benefit from revised priority sector lending regulations, brokerages say

Indian Renewable Energy Development Agency

25/03/2025 05:36

** India's heavyweight financial services .NIFTYFIN rise 0.7%, leading benchmark Nifty 50 .NSEI 0.4% higher

** Central bank issued revised guidelines on Monday to expand coverage of priority sector lending (PSL) and increase loan limits across sectors

** Enhanced PSL coverage expected to facilitate better targeting of bank credit to priority sectors and will be positive for banks, say Citi Research and Jefferies

** Higher growth in priority sector loans for Indian banks in previous three fiscal years reflect a mix of capacity to lend to those segments of borrowers and compliance, says Jefferies

** Both brokerages see top private lender HDFC Bank HDBK.NS, which had 36% of PSL in FY24 domestic loans, as potential beneficiary

** HDBK up 2.1% on Tues; renewable energy financier IREDA INAR.NS up 1% after RBI expands scope for renewable energy loans

 (Reporting by Bharath Rajeswaran in Bengaluru)

 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))