Current Targets in Priority Sector Lending
As of March 2015, the domestic banks and foreign banks with 20 and more branches have to disburse 40% of the Net Bank Credit (NBC) to Total Priority sector, out of which 18% should be total agricultural advances. The Foreign banks have been given a target of 32% of the Net Bank Credit to priority sector, however, there is no lower limit fixed for agriculture.
Net Bank Credit is the figure reported in the fortnightly return submitted to RBI by the Banks. But, the outstanding deposits under the FCNR (B) and NRNR (Non-Resident Non-Reptriable Term Deposit Account) Schemes are excluded from net bank credit for computation of priority sector lending target/ sub-targets.
|Type of Loan||Domestic banks and foreign banks with 20 or more branches||Foreign banks with less than 20 branches|
|Total Priority Sector advances||40 percent of NBC||32 percent of NBC|
|Total agricultural advances||18 percent of NBC||No target|
|SSI advances||No target||10 percent of NBC|
|Export credit||Export credit does not form part of priority sector||12 percent of NBC|
|Advances to weaker sections||10 percent of NBC||No target|
Following have been defined by RBI have weaker sections of the society:
- Small and marginal farmers;
- Artisans, village and cottage industries where individual credit limits do not exceed 50,000;
- Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY), now National Rural Livelihood Mission (NRLM);
- Scheduled Castes and Scheduled Tribes;
- Beneficiaries of Differential Rate of Interest (DRI) scheme;
- Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY);
- Beneficiaries under the Scheme for Rehabilitation of Manual Scavengers (SRMS);
- Loans to Self Help Groups;
- Loans to distressed farmers indebted to non-institutional lenders;
- Loans to distressed persons other than farmers not exceeding 50,000 per borrower to prepay their debt to non-institutional lenders;
- Loans to individual women beneficiaries upto 50,000 per borrower;
RBI Guidelines on weaker sections
RBI keeps issuing guidelines for the Priority sector lending. The overall target set by the RBI for the priority sector lending is 40% of the adjusted net bank credit (ANBC) out of which 18% is fixed for agriculture sector and 10% for weaker sections of the society.