Banking Awareness 2017 Inwards Uncomplicated Linguistic Communication – Lesson 12

Dear Gr8 Ambitionists, inwards our yesterday’s Banking Awareness 2017 Lesson 11, nosotros convey learnt near Types of Loans inwards India. In today’s lesson, nosotros shall larn near the Priority Sector Lending . Happy Reading 🙂 

Banking Awareness 2017 : Priority Sector Lending

Priority Sector Lending
  • Priority Sector refers to those sectors of the economic scheme which may non acquire timely as well as adequate credit inwards the absence of this particular dispensation. Priority sector was outset properly defined inwards 1972, afterward the National Credit Council emphasized that in that place should live a larger involvement of the commercial banks inwards the priority sector.
  • The sector was as well as thence defined past times Dr. K south Krishnaswamy Committee.

What is Priority Sector Lending ?

Priority Sector Lending is an of import role given past times the Reserve Bank of Republic of Republic of India (RBI) to the banks for providing a specified part of the banking company lending to few specific sectors similar agriculture, micro as well as little enterprises, piteous people for housing, students for didactics as well as other depression income groups as well as weaker sections.
Historical Background (Important Years) :
  • 1972 : Priority Sector (PS) concept was evolved
  • 1974 : 1st Target : 1/3rd of Total advances
  • 1980 : Target revised : 40% of aggregate credit
  • 2012 : M. V. Nair Committee working upto 232/4/15
  • 2015 : Internal working grouping of RBI working from 23/04/15

(A) Targets /Sub-targets for Priority sector


Categories
Domestic Commercial Banks & Foreign Banks alongside twenty as well as higher upward branches [Excluding RRBs]
Total Priority Sector
twoscore pct of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Agriculture
18% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Small as well as Marginal Farmers
Within the xviii pct target for agriculture, a target of 8 pct of ANBC or Credit Equivalent Amount of Off Balance Sheet Exposure, whichever is higher is prescribed for Small as well as Marginal Farmers, to live achieved inwards a
phased mode i.e., 7%  by March 2016 as well as 8 per cent past times March 2017.
Micro Enterprises
7.5 pct of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher to live achieved inwards a phased mode i.e. vii per cent past times March 2016 as well as 7.5 per cent past times March 2017.
Advances to Weaker Sections
15% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.

 

(B) Target for unusual banks alongside less than twenty branches

40% of ANBC or credit equivalent total of off-balance canvas exposure, whichever is higher inwards a phased mode past times 2020 equally nether :

  • 2015-16 = 32
  • 2016-17 = 34
  • 2017-18 = 36
  • 2018-19 = 38
  • 2019-20 = 40

(C) Targets for Priority Sector for RRB urban co-operative Banks 

75% of overall priority sector for RRBs (of full advances)

Categories nether priority sector

  • Agriculture
    • Farm credit
    • Agriculture Infrastructure
    • Ancillary Actvities
  • Micro, Small as well as Medium Enterprises
  • Export Credit
  • Education
  • Housing
  • Social Infrastructure
  • Renewable Energy
  • Weaker Sections
  • Others  

Agriculture :

  1. Farm Credit 
    • Loans for crop loan to farmer.
    • Loans upto fifty lacs against crop for 12 months.
    • Loans to farmer nether KCC.
    • Loans for province to marginal & little farmers. 
    • Loans to corporate [for agri & allied activities] upto 2 crores including : Crop loans, medium & long term loans, loans for pre as well as postal service harvest activities, loans upto fifty lacs against crop for a stream of 12 months.
  2. Agriculture Infrastructure 
    • An aggregate sanctioned restrain of Rs. 100 crore borrower from banking organization for 
      • Construction of storage facilities
      • Soil conservation as well as watershed development
      • Plant tissue civilization as well as agri bio technology, bio fertilizer etc
  3. Ancillary activities
    • Loans upto v crores to co-operative societies of farmers. 
    • Loans for setting upward clinic, Agri concern centres. 
    • Loans for nutrient as well as processing upto 100 crore.
    • Loans to MFI’s (Micro Finance Institutions) for lending to Agriculture. 

MSME

  • Entire financing to manufacturing sector is eligible. 
  • Financing upto v crore per unit of measurement MSE as well as upto 10 crore per unit of measurement to medium units to service sector. [we shall larn near this inwards details inwards coming lessons]

Export Credit

  • Incremental export credit upto 2% of ANBC or CEOBE maximum 25 crore per borrower to units having turnover upto 100 crores for Domestic Banks. 
  • Incremental export credit upto 2% of ANBC or CEOBE w.e.f. 1st Apr 2017 for unusual banks alongside twenty as well as higher upward branches. 
  • 32% of ANBC or CEOBE for unusual banks alongside less than twenty branches. 

Education 

  • Loans to private for educational purposes upto 10 lacs.

Housing Loan

  • To individuals upto 28 lacs inwards subway scheme centres [with population 10 lac & above] provided overall toll of abode unit of measurement should non top Rs. 35 lacs.
  • Loans to private upto Rs. twenty lacs inwards other area, overall toll of abode unit of measurement should non top Rs. 25 lacs.

Social Infrastructure 

  • Banks loans upto v crore per borrower for social infrastructure. 

Renewable Energy 

  • Bank loans upto xv crore for role similar solar based mightiness plant, windmills, street lighting system. 
  • For private loan upto 10 lacs per borrower. 

Weaker Sections 

  • Small & Marginal farmers. 
  • Individual women beneficiaries upto 1 lacs per borrower. 
  • Schedule castes as well as scheduled tribes. 
  • Overdraft upto 5000 inwards PMJDV a/c. 
  • Self Help Group (SHG)
  • Distressed persons other than farmers upto 1 lacs.
  • Person alongside disability.

Note : As per guidelines of RBI from 1st Jan 2016 Priority Sector Lending volition live monitored quarterly besides equally annually.

Common guidelines for priority sector loans

Banks should comply alongside the next mutual guidelines for all categories of advances nether the priority sector.
  • Rate of interest
    • The rates of involvement on banking company loans volition live equally per directives issued past times our Department of Banking Regulation from fourth dimension to time.
  • Service charges
    • No loan related as well as adhoc service charges/inspection charges should live levied on priority sector loans upward to ₹ 25,000.
  • Receipt, Sanction/Rejection/Disbursement Register
    • A register/ electronic tape should live maintained past times the bank, wherein the appointment of receipt, sanction/rejection/disbursement alongside reasons thereof, etc., should live recorded. The register/electronic tape should live made available to all inspecting agencies.
  • Issue of Acknowledgement of Loan Applications
    • Banks should supply acknowledgement for loan applications received nether priority sector loans.
    • Bank Boards should prescribe a fourth dimension restrain within which the banking company communicates its determination inwards writing to the applicants.

That’s all for immediately friends. In our adjacent lesson, nosotros shall larn near Charging of Securities and NPA (Non-Performing Assets). Happy Reading 🙂

sponsored links

Leave a Reply