04-07-2012, 03:04 PM
PRIORITY SECTOR LENDING
PRIORITY SECTOR LENDING.pptx (Size: 307.32 KB / Downloads: 38)
Background
Initially, in July 1968, at a meeting of National Credit Council emphasis was laid that commercial banks should increase their involvement in the financing of priority sectors. The description of the priority sectors was later formalised in 1972.
In Nov 1974, banks were advised to raise the share of these sectors to the level of 33⅓ % by March 1979.
Subsequently, on the basis of the recommendations of the working group (Chairman: Dr.K.S.Krishnaswamy), all commercial banks were advised to achieve the target of priority sector lending at 40% of aggregate bank advances by 1985. sub targets were also specified for lending to agriculture and the weaker sections.
Extreme focus groups
Rural and urban poor
Weaker sections
Agricultural labourers, small and marginal farmers
Rural artisans, village cottage industries
Unemployed youth
Beneficiaries of Government sponsored programs
Scheduled caste / Scheduled tribes
Beneficiaries of DRI scheme
SHG members
Minority communities
Direct finance to agriculture
Broad categories
Crop loans
Produce loans
Term loans and working capital limits
Land purchase loans
Loans for indebtedness relief
All pre and post harvest activities
Shortfall in targets: foreign banks
Amount of shortfall with reference to the overall target (32%) or aggregate shortfall in sub targets small enterprise sector (10%) and export credit (12%), whichever is higher, computed as on last reporting Friday of March every year, will be placed with SIDBI (in Small Enterprises Development Fund) or any other fund notified by RBI.