Soul of Banking Awareness- III

Dear Aspirants

In continuation of our series Soul of Banking Awareness we are providing you an important article on Priority Sector Lending. Hope this will surely help you in your preparation.

Priority Sector Lending

Those sectors in the economy which do not get timely and adequate credits comes under the Priority Sector. It is due to the special endowment. In India there are more rural sectors as compared to urban sectors. The Indian economy is totally dependent on these rural sectors. By providing Loans at accurate requirement can help the farmers to produce more efficiently. Scope of Priority Sectors is held to a give a huge impact on population.

To provide loans on factual timings this important role has been given by RBI (Reserve Bank of India) to other banks and it is known as Priority Sector Lending. RBI has revised it guidelines for trading in Priority Sector Lending. According to these guidelines different banks involved in this sector can buy & sell Priority Sector Lending to dominate the requirements of Private Sector Lending.

Authority for priority Sector Lending

Reserve Bank of India (RBI) has given the authority for priority Sector Lending to other banks to provide timely credit. Different types of pattern are prepared for providing funds in these sectors such as loan given to a farmer is set for a paddy farmer it is 50 lakhs but for a bee farmer it is 2 crore. In same way different segments are being set so conflict arises later. 

Sectors Included in PSL:-

Broad categories of Priority Sector are:

• Agriculture and Allied Activities
• Small Scale Industries
• Small Business/Service Enterprises
• Micro Credit
• Education Loans

Banks Contributing

Banks has been contributing to Priority Sector Banking by extending the credit on assenting term. The Top 10 banks which are assisting for fund in priority sector banking are:

1. State Bank OF India
2. Punjab National Bank
3. Canara Bank
4. Bank of Baroda
5. Bank of India
6. Union Bank of India
7. IDBI Bank
8. Central Bank of India
9. Indian Overseas Bank
10. Syndicate Bank

Targets and sub-targets for banks under priority sector :

Loan limit in Each Sector:

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Team GradeUp..!!