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(As
on May 10, 2016)
1. What are the different
categories under priority sector?
Priority Sector includes the
following categories:
(i) Agriculture
(ii) Micro, Small and Medium Enterprises
(iii) Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others
2. What are the Targets and
Sub-targets for banks under priority sector?
The targets and sub-targets for
banks under priority sector are as follows:
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Categories
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Domestic
scheduled commercial banks and Foreign banks with 20 branches and above
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Foreign
banks with less than 20 branches
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Total Priority Sector
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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 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.
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40 percent of Adjusted Net
Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure,
whichever is higher; to be achieved in a phased manner by 2020.
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Agriculture #
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18 percent of ANBC or Credit
Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Within the 18 percent target
for agriculture, a target of 8 percent of ANBC or Credit Equivalent
Amount of Off-Balance Sheet Exposure, whichever is higher is prescribed
for Small and Marginal Farmers, to be achieved in a phased manner i.e., 7 per cent 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.
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Not applicable
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Micro Enterprises
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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 per cent by March 2016 and 7.5 per cent 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.
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Not Applicable
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Advances to Weaker Sections
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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.
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Not Applicable
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# Domestic banks have been
directed to ensure that their overall direct lending to non-corporate
farmers does not fall below the system-wide average of the last three
years achievement.
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3. What are the categories under
‘Agriculture’?
The activities covered under
Agriculture are classified under three sub-categories viz. Farm credit,
Agriculture infrastructure and Ancillary activities.
4. Whether limits are prescribed
for loans sanctioned to Micro, Small and Medium Enterprises to be
classified as priority sector?
For classification under
priority sector, no limits are prescribed for bank loans sanctioned to
Micro, Small and Medium Enterprises engaged in the manufacture or
production of goods under any industry specified in the first schedule to
the Industries (Development and Regulation) Act, 1951 and as notified by
the Government from time to time. The manufacturing enterprises are defined
in terms of investment in plant and machinery under MSMED Act, 2006.
Bank loans up to ₹ 5 crore per
unit to Micro and Small Enterprises and ₹ 10 crore to Medium Enterprises
engaged in providing or rendering of services and defined in terms of
investment in equipment under MSMED Act, 2006 are eligible for classification
under priority sector.
5. What is the applicable limit
and purpose for social infrastructure loans under priority sector?
Bank loans up to a limit of ₹ 5
crore per borrower for building social infrastructure for activities namely
schools, health care facilities, drinking water facilities and sanitation
facilities (including loans for construction/ refurbishment of toilets and
improvement in water facilities in the household) in Tier II to Tier VI
centres are eligible for classification under priority sector.
Bank credit to Micro Finance
Institutions (MFI) extended for on-lending to individuals/ members of SHGs/
JLGs for water and sanitation facilities is also eligible for
classification as priority sector loans under ‘Social Infrastructure’ subject
to certain criteria.
6. What is the applicable limit
and purpose for loans for renewable energy under priority sector?
Bank loans up to a limit of ₹ 15
crore to borrowers for purposes like solar based power generators, biomass
based power generators, wind mills, micro-hydel plants and for
non-conventional energy based public utilities viz. street
lighting systems, and remote village electrification are eligible to be
classified under priority sector loans under ‘Renewable Energy’. For
individual households, the loan limit is ₹ 10 lakh per borrower.
7. What is the loan limit for
education under priority sector?
Loans to individuals for
educational purposes including vocational courses upto ₹ 10 lakh
irrespective of the sanctioned amount are eligible for classification under
priority sector.
8. What is the limit for housing
loans under priority sector?
Loans to individuals up to ₹ 28
lakh in metropolitan centres (with population of ten lakh and above) and
loans up to ₹ 20 lakh in other centres for purchase/construction of a
dwelling unit per family, are eligible to be considered as priority sector
provided the overall cost of the dwelling unit in the metropolitan centre
and at other centres does not exceed ₹ 35 lakh and ₹ 25 lakh, respectively.
Housing loans to banks’ own employees are not eligible for classification
under priority sector.
9. What is included under Weaker
Sections under priority sector?
Priority sector loans to the
following borrowers are eligible to be considered under Weaker Sections
category:-
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No.
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Category
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1.
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Small and Marginal Farmers
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2.
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Artisans, village and cottage
industries where individual credit limits do not exceed ₹ 1 lakh
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3.
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Beneficiaries under Government
Sponsored Schemes such as National Rural Livelihoods Mission (NRLM),
National Urban Livelihood Mission (NULM) and Self Employment Scheme for
Rehabilitation of Manual Scavengers (SRMS)
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4.
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Scheduled Castes and Scheduled
Tribes
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5.
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Beneficiaries of Differential
Rate of Interest (DRI) scheme
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6.
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Self Help Groups
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7.
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Distressed farmers indebted to
non-institutional lenders
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8.
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Distressed persons other than
farmers, with loan amount not exceeding ₹ 1 lakh per borrower to prepay
their debt to non-institutional lenders
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9.
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Individual women beneficiaries
up to ₹ 1 lakh per borrower
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10.
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Persons with disabilities
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11.
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Overdrafts upto ₹ 5,000/-
under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts, provided the
borrowers’ household annual income does not exceed ₹ 100,000/- for rural
areas and ₹ 1,60,000/- for non-rural areas
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12.
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Minority communities as may be
notified by Government of India from time to time
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In States, where one of the
minority communities notified is, in fact, in majority, item (12) will
cover only the other notified minorities. These States/ Union Territories
are Jammu & Kashmir, Punjab, Meghalaya, Mizoram, Nagaland and
Lakshadweep.
10. Is bank credit to Micro
Finance Institutions (MFIs) treated as priority sector lending?
Bank credit to MFIs extended for
on-lending to individuals and also to members of SHGs / JLGs is eligible
for categorisation as priority sector advance under respective categories
viz., Agriculture, Micro, Small and Medium Enterprises, Social
Infrastructure and Others subject to the criteria laid down in para IX of
the Master Circular FIDD.CO.Plan.BC.04/04.09.01/2015-16 dated July 1,
2015on Priority Sector Lending- Targets and Classification.
11. What are Priority Sector
Lending Certificates (PSLCs)?
Priority Sector Lending
Certificates (PSLCs) are a mechanism to enable banks to achieve the
priority sector lending target and sub-targets by purchase of these
instruments in the event of shortfall. This also incentivizes surplus banks
as it allows them to sell their excess achievement over targets thereby
enhancing lending to the categories under priority sector. Under the PSLC
mechanism, the seller sells fulfilment of priority sector obligation and
the buyer buys the obligation with no transfer of risk or loan assets.
12. What are the instructions to
Banks with regard to acknowledgement of priority sector loan applications?
Banks should provide
acknowledgement for loan applications received under priority sector loan.
A time limit is required to be prescribed by the Bank Board within which
the bank communicates its decision in writing to the applicants.
13. What is the rate of interest
for loans under priority sector?
The rate of interest on bank
loans will be as per directives issued by the Department of Banking
Regulation of RBI, from time to time. Priority sector guidelines do not lay
down any preferential rate of interest for priority sector loans.
14. Where are the latest
instructions on Priority Sector Lending available?
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