Banks have to lend a minimum of 40% to the priority sector, which includes all of the given sectors. Priority Sector Lending is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to a few specific sectors, like:
- Agriculture and allied activities, - Micro and small enterprises, - Poor people for housing, - Students for education, and - Other low-income groups and weaker sections. This is essentially meant for all-round development of the economy as opposed to focusing only on the financial sector.