Regional Rural Banks – Priority Sector Lending – Targets and Classification

Additional Reading Material for Module A and Module D

Regional Rural Banks – Priority Sector Lending – Targets and Classification

Considering the growing significance of RRBs in pursuit of financial inclusion agenda, RBI decided to revise the priority sector guidelines for RRBs. Accordingly, the comprehensive revised guidelines on Priority Sector Lending – Targets and Classification for Regional Rural Banks were published by RBI. The revised guidelines will be operational with effect from January 1, 2016.

Some of the salient features of the guidelines are as under:-

(i) Targets: 75 per cent of total outstanding to the sectors eligible for classification as priority sector lending and sub sector targets as indicated in subsequent paragraphs.

(ii) Categories of the Priority Sector: Medium Enterprises, Social Infrastructure and Renewable Energy will form part of the Priority Sector, in addition to the existing categories, with a cap of 15 per cent of total outstanding.

(iii) Agriculture: 18% per cent of total outstanding should be advanced to activities mentioned under Agriculture.

(iv) Small and Marginal Farmers: A target of 8 percent of total outstanding has been prescribed for Small and Marginal Farmers within Agriculture.*

(v) Micro Enterprises: A target of 7.5 per cent of total outstanding has been prescribed for Micro Enterprises. **

(vi) Weaker Sectors: A target of 15 per cent of total outstanding has been prescribed for Weaker Sections.

(vii) Monitoring: Priority Sector Lending will be monitored on a quarterly as well as annual basis.

(* RRBs that have not achieved the 8 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 8 per cent by March 2017.)

(**RRBs that have not achieved the 7.5 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 7.5 per cent by March 2017.)

For More Details refer :Regional Rural Banks - Priority Sector Lending – Targets and Classification

Source : www.rbi.org.in

 

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