Saturday, 4 January 2020

Lendings-5 , Banking Fundamentals to Know for Students.

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PRIORITY SECTOR LENDING-TARGETS AND CLASSIFICATION                                       

Categories under priority sector
(i)   Agriculture
(ii)  Micro, Small and Medium Enterprises
(iii)  Export Credit
(iv)  Education
(v)   Housing
(vi)  Social Infrastructure
(vii)  Renewable Energy
(viii)  Others 
Categories 
i)Domestic scheduled commercial banks and Foreign banks with 20 branches and above.
ii)Foreign banks with less than 20 branches.

Total Priority Sector
40 percent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.

Foreign banks with 20 branches and above have to achieve the Total Priority Sector Target within the maximum period of five years starting from April 1, 2013, and ending on March 31, 2018 as per the action plans submitted by them and approved by RBI.

40 percent of Adjusted Net Bank or Credit Equivalent Amount of OffBalance Sheet Exposure, whichever is higher; to be achieved in a phased manner by 2020.

Agriculture- 18 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Within the 18 percent target for agriculture, the target of 8 percent of ANBC or Credit Equivalent Amount of OffBalance Sheet Exposure, whichever is higher is prescribed for Small and Marginal Farmers, to be achieved in a phased manner i.e., 7 percent by March 2016 and 8 per cent by March 2017.

Foreign banks with 20 branches and above have to achieve the Agriculture Target within a maximum period of five years starting from April 1, 2013, and ending on March 31, 2018, as per the action plans submitted by them and approved by RBI.

The sub-target for Small and Marginal farmers would be made applicable post-2018 after a review in 2017.
Micro Enterprises 
7.5 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher to be achieved in a phased manner i.e. 7 percent by March 2016 and 7.5 percent by March 2017.
The sub-target for Micro Enterprises for foreign banks with 20 branches and above would be made applicable post-2018 after a review in 2017.

Advances to Weaker Sections
10 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Foreign banks with 20 branches and above have to achieve the Weaker Sections Target within a maximum period of five years starting from April 1, 2013, and ending on March 31, 2018, as per the action plans submitted by them and approved by RBI.

The Total Priority Sector target of 40 percent for foreign banks with less than 20 branches has to be achieved in a phased manner as under:
Financial Year The Total Priority Sector as percentage of ANBC or Credit Equivalent Amount of OffBalance Sheet Exposure, whichever is higher 2015-16: 32% ; 2016-17 :34% ;2017-18-36% ;2018-19-38% ;2019-20- 40%.

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