, . 5, - 32 , () - 122001. 0124-4126147/148/149/150 .

0124-4126162

Rural Development & Priority Sector Department Head Office: 1st Floor, Plot No - 5, Sector 32 Institutional Area, Gurgaon, Haryana 122001. Telephone No 0124 4126147/148/149/150 Fax no. 0124 - 4126162

Circular No. HO/RD & PS/47/2012-13/554

Date : 03.11.2012

All the Branches/Offices

PRIORITY SECTOR LENDING TARGETS AND CLASSIFICATION The master circular on Priority Sector Lending Target and Classification issued by RBI vide their circular no. RBI/2012-13/138 RPCD. CO. Plan. BC 13/04.09.01/2012-13 dated July 20, 2012 was circulated vide our circular no. HO: RD &PS:29:2012-13:324 21.07.2012. The RBI vide their letter RPCD. CO. Plan. BC 37/04.09.01/2012-13 dated October 17, 2012, has made the following additions and amendments in the aforesaid master circular dated 20.07.2012:Agriculture: Loans to corporates, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture (up to cocoon stage) up to an aggregate limit of `2 crore per borrower shall be classified under DIRECT Agriculture. If the aggregate loan limit per borrower is more than `2 crore to such entrepreneurs, the entire loan should be treated as INDIRECT finance to agriculture. Micro & Small Enterprises (Service Sector): Bank loans upto an aggregate loan limit of `2 crore per borrower/unit to Micro and Small Enterprises (MSE) engaged in providing or rendering of services will be eligible for classification as direct finance to MSE Sector under priority sector, provided they satisfy the investment criteria for equipment as defined under MSMED Act, 2006. Housing Loan: The ceiling to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers has been raised from of `5 lakh to `10 lakh.

 The ceiling total cost of house has been raised from `5 lakh to `10 lakh per dwelling unit for the loans sanctioned for housing projects exclusively for the purpose of construction of houses only to economically weaker sections and low income groups. Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of `10 lakh per borrower, provided the all inclusive interest rate charged to the ultimate borrower is not exceeding lowest lending rate of the lending bank for housing loans plus two percent per annum shall be covered under priority sector. The eligibility under priority sector loans to HFCs is restricted to five percent of the individual banks total priority sector lending, on an ongoing basis. A copy of additions/amendments is enclosed as Annexure-A (RBI circular dated 17.10.2012). All field functionaries including officers of Regional Offices are advised to go through these additions/amendments and comply with all instructions/guidelines contained therein in letter and spirit. Please note that the additions and amendments will be operational with effect from July 20, 2012.

(P S Hooda) General Manager (RD & PS)