The Reserve Bank of India has introduced a requirement for lenders to obtain auditor certification when claiming Priority Sector Lending benefits. This marks a significant shift in how PSL compliance is verified and reported to regulators.
The move addresses three core issues: preventing double-counting of advances across lenders, improving the accuracy of PSL data submitted to the RBI, and strengthening regulatory oversight of the sector. Previously, lender self-reporting created gaps that auditor certification now closes.
PSL targets have long been a cornerstone of RBI's credit allocation policy, directing a portion of bank lending toward agriculture, small business, and other priority sectors. This new requirement applies across all entity types claiming such benefits.
The certification requirement signals a transition away from volume-driven compliance toward verified, accountable lending. Lenders must now demonstrate—through independent audit—that their PSL claims are accurate and non-duplicative.
For FY26 and beyond, banks, NBFCs, and MFIs will need to integrate auditor certification into their compliance workflows. The added rigor is expected to increase administrative burden but reduce regulatory risk.
