Priority Sector Lending Targets for Banks in India

Priority Sector Lending Targets
Priority Sector Lending Targets for Banks in India: Banks in India are required to lend a certain percentage of their total loans to what are classified as ‘priority sectors’. The government has identified ten sectors which it considers important for the development of the country and stipulates that 40% of all bank lending must go towards these sectors.

The definition of priority sectors has been expanded over time and now includes agriculture, small and medium enterprises, education, housing, social infrastructure, renewable energy, etc.

The targets for priority sector lending are reviewed and revised periodically by the RBI in consultation with the government.

Priority sectors in India

1) Agriculture

2) Micro Small and Medium Enterprises

3) Education

4) Housing

5) Export Credit.

6) Social Infrastructure

7) Renewable Energy

8) Others.

Priority Sector Lending Targets for Banks

Categories Domestic scheduled commercial banks and foreign banks with 20 branches and above Regional Rural Banks Small Finance Banks Foreign banks with less than 20 branches
Total Priority Sector 40 per cent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. 75 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher; However, lending to Medium Enterprises, Social Infrastructure and Renewable Energy shall be reckoned for priority sector achievement only up to 15 per cent of ANBC. 75 per cent of ANBC as computed in para 6 below or CEOBE whichever is higher. 40 per cent of Adjusted Net Bank Credit or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher; out of which up to 32% can be in the form of lending to Exports and not less than 8% can be to any other priority sector
Agriculture “18 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.
Within the 18 per cent 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.##”
18 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. 18 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. Not applicable
Micro Enterprises 7.5 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher 7.5 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher 7.5 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher Not applicable
Advances to Weaker Sections 12 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher 15 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher 12 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher Not applicable

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