Explanation:

Here’s the thing with Priority Sector Lending (PSL) and MSMEs:

- The RBI, in 2020, revised the PSL guidelines. They said, loans to MSMEs for service and manufacturing are eligible up to ?50 crore per borrower for being counted toward PSL targets.

- Earlier, the limit was much lower—around ?25 crore.

- Now, if we look at each option:

- Option 1: ?10 crore — too low, that was an older cap.

- Option 2: ?20 crore — again, below the updated threshold.

- Option 3: ?40 crore — still not the current mark.

- Option 4: ?50 crore — absolutely on point, this is the correct updated limit for medium enterprises under PSL.

- Option 5: ?80 crore — overstates it, not recognized under current PSL norms.

- This simply means MSMEs can now get bigger loans up to ?50 crore that qualify banks for PSL credit.