Explanation
- A
1 Only
1 only. The 15–25 crore band is not the MSMED Act, 2006 definition of medium enterprises.
- B
2 Only
2 only. Bank loans to MSMEs sit under priority-sector lending. Statement 1 uses the wrong investment band.
- C
Both 1 and 2
Both. Statement 1 fails the 2006 (and later notified) thresholds.
- D
Neither 1 nor 2
Neither. PSL treatment of MSME credit is standard RBI policy.
Summary. Official key is (b) 2 only. All bank loans to MSMEs count toward the priority sector (within RBI’s PSL rules). The MSMED Act / later composite criteria do not define ‘medium’ as plant-and-machinery between ₹15 crore and ₹25 crore — that band is the false limb.
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