RRBs' Gross Loans Rise 10.3% To ₹5.78 Lakh Crore In FY26; PSL Achievement At 91.7%

Regional Rural Banks (RRBs) continued to expand credit delivery and support financial inclusion in 2025-26, with their gross loans outstanding rising 10.3% to ₹5,78,349 crore, the Finance Ministry said on Tuesday.

Gross loans outstanding of RRBs stood at ₹5,24,163 crore at the end of 2024-25.

The performance of RRBs under the Reserve Bank of India's Priority Sector Lending (PSL) framework also remained strong during the year, with the average achievement against the overall prescribed target of 75% reaching 91.7% of Adjusted Net Bank Credit (ANBC), the ministry said in a statement.

Almost all RRBs achieved the overall PSL target, reflecting their continued focus on priority sectors and financial inclusion, it said.

Agriculture and allied activities remained the largest component of the RRB credit portfolio, with outstanding credit at ₹3.78 lakh crore, accounting for 77% of total PSL.

Farm credit accounted for nearly 98% of agricultural lending, supporting crop cultivation, allied activities, and investment in the rural economy.

Credit to the micro, small and medium enterprises (MSME) sector stood at ₹66,978 crore, or 13.6% of total PSL.

More than 95% of MSME lending was directed towards micro enterprises, underscoring the focus of RRBs on financing first-generation entrepreneurs, self-employed individuals, artisans and small business units in rural and semi-urban areas.

Within MSME lending, the services sector accounted for the largest share, followed by manufacturing enterprises and Khadi and Village Industries, the ministry said.

RRBs also extended ₹3.49 lakh crore of credit to weaker sections, reaffirming their role in expanding access to institutional credit among underserved segments.

Lending for housing, education, renewable energy and social infrastructure further contributed to inclusive and sustainable development by supporting human capital formation, household asset creation, clean energy adoption and local infrastructure, it said.

The ministry said the financial performance of RRBs during FY26 reflected sustained expansion in rural credit and continued alignment with national development priorities.

RRBs remain key institutions in advancing financial inclusion, strengthening rural livelihoods and supporting farmers, micro-enterprises and other underserved sections of the economy, it added.