PRIORITY SECTOR LENDING

PRESENTED BY, RAMYA.R

.Priority sector y Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors .

What does the priority sector comprise ? y Agriculture . y Small scale industries (including setting up of industrial estates) y Small road and water transport operators (owning upto 10 vehicles). y Small business (Original cost of equipment used for business not to exceed Rs 20 lakh) y Retail trade (advances to private retail traders upto Rs.10 lakh) .

Contd«. Loans upto Rs 1 lakh and Rs 2 lakh for repairing of houses in rural/ semi-urban and urban areas respectively]. y State sponsored organisations for Scheduled Castes/Scheduled Tribes .5 lakhs (direct loans upto Rs 10 lakh in urban/ metropolitan areas). y Education (educational loans granted to individuals by banks) y Housing [both direct and indirect ± loans upto Rs. .

y Loans to the software industry (having credit limit not exceeding Rs 1 crore from the banking system) y Loans to specified industries in the food and agroprocessing sector having investment in plant and machinery up to Rs 5 crore. Loans to self help groups(SHGs) / Non Governmental Organisations (NGOs) . .Contd«. y Micro-credit provided by banks either directly or through any intermediaty.

The weaker sections under priority sector y Small and marginal farmers with land holding of 5 acres and less and landless labourers. y Artisans.000/y Beneficiaries of Swarnjayanti Gram Swarojgar Yojana (SGSY) y Scheduled Castes and Scheduled Tribes . 50. tenant farmers and share croppers. village and cottage industries where individual credit limits do not exceed Rs.

y Self Help Groups (SHGs) . y Beneficiaries under the Scheme for Liberation and Rehabilitation of Scavangers (SLRS).Contd«. y Beneficiaries of Differential Rate of Interest (DRI) scheme .

the interest rate should not exceed the prime lending rate (PLR) of the bank. y In the case of loans above Rs 2 lakh. in the case of loans upto Rs 2 lakh.What is the rate of interest for loans under priority sector ? y As per the current interest rate policy. banks are free to determine the interest rate. .

District and Block levels).How is priority sector lending monitored by the Reserve Bank ? y Priority sector lending by commercial banks is monitored by Reserve Bank of India through periodical Returns received from them. . Performance of banks is also reviewed in the various fora set up under the Lead Bank Scheme (at State.

THANK YOU .

Sign up to vote on this title
UsefulNot useful