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SEBI cautions Investors against Dealing

Published on June 11, 2022
Current Context: The RBI has advised Small Finance Banks to continue to evolve in tune with the differentiated banking license given to them, with proportionate growth in their capital base.
SEBI cautions Investors against Dealing
  • Recently SFBs’ priority sector lending in total lending declined for the 4th consecutive year during FY21, which accounts for more than 28% of total loans as of March 2021-end.
  • According to RBI data, The share of SFBs’ PSL in total lending declined from 76% in FY20 to 71.8% in FY21.
  • Considering the above factors this advisory has been issued by RBI to keep SFBs in tune with differentiated licenses.
  • Besides gross non-performing assets (GNPAs) of SFBs rose to 5.4% of gross advances as of March 2021-end, against 1.9% as of March 2020-end.
  • It has been observed that the sustainable growth of SFBs, particularly their business model and governance, should be redesigned after considering the developments in this sector.


Q.1 According to RBI data, total lending declined from 76 percent in FY20 to ________ FY21.
a. 68.9%
b. 71.8%
c. 72.8%
d. 70.1%

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