{"id":1982,"date":"2024-03-31T00:20:36","date_gmt":"2024-03-30T18:50:36","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1982"},"modified":"2024-04-03T07:01:03","modified_gmt":"2024-04-03T01:31:03","slug":"q-priority-sector-lending-by-banks-in-india-constitutes-the-lending-to","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-priority-sector-lending-by-banks-in-india-constitutes-the-lending-to","title":{"rendered":"Q.\u00a0Priority Sector Lending by banks in India constitutes the lending to"},"content":{"rendered":"\n<ul class=\"mcq wp-block-list\">\n<li>agriculture<\/li>\n\n\n\n<li>micro and small enterprises<\/li>\n\n\n\n<li>weaker sections<\/li>\n\n\n\n<li>All of the above<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (d) All of the above<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"priority-sector-lending\">Priority Sector Lending:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Priority Sector means&nbsp;<strong>those sectors which the Government of India and Reserve Bank of India consider as important for the development of the basic needs of the country and are to be given priority over other sectors<\/strong>. The banks are mandated to encourage the growth of such sectors with adequate and timely credit.<\/li>\n\n\n\n<li>The categories of priority sector are as follows\n<ul class=\"wp-block-list\">\n<li>Agriculture<\/li>\n\n\n\n<li>Micro, Small and Medium Enterprises<\/li>\n\n\n\n<li>Export Credit<\/li>\n\n\n\n<li>Education<\/li>\n\n\n\n<li>Housing<\/li>\n\n\n\n<li>Social Infrastructure<\/li>\n\n\n\n<li>Renewable Energy<\/li>\n\n\n\n<li>Others<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"weaker-sections-under-priority-sector\">Weaker sections under Priority sector<\/h6>\n\n\n\n<p class=\"wp-block-paragraph\">Priority sector loans to the following borrowers will be considered under Weaker Sections category<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th><strong>Sl.No<\/strong><\/th><th><strong>Category<\/strong><\/th><\/tr><\/thead><tbody><tr><td>1.<\/td><td>Small and Marginal Farmers<\/td><\/tr><tr><td>2.<\/td><td>Artisans, village and cottage industries where individual credit limits do not exceed Rs 1 lakh<\/td><\/tr><tr><td>3.<\/td><td>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)&nbsp;<\/td><\/tr><tr><td>4.<\/td><td>Scheduled Castes and Scheduled Tribes<\/td><\/tr><tr><td>5.<\/td><td>Beneficiaries of Differential Rate of Interest (DRI) scheme&nbsp;<\/td><\/tr><tr><td>6.<\/td><td>Self Help Groups<\/td><\/tr><tr><td>7.<\/td><td>Distressed farmers indebted to non-institutional lenders<\/td><\/tr><tr><td>8.<\/td><td>Distressed persons other than farmers, with loan amount not exceeding Rs 1 lakh per borrower to prepay their debt to non-institutional lenders<\/td><\/tr><tr><td>9.<\/td><td>Individual women beneficiaries up to Rs 1 lakh per borrower<\/td><\/tr><tr><td>10.<\/td><td>Persons with disabilities<\/td><\/tr><tr><td>11.<\/td><td>Minority communities as may be notified by Government of India from time to time<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"priority-sector-lending-targets\"><strong>Priority Sector Lending Targets:<\/strong><\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Domestic Scheduled Commercial Banks and Foreign Banks with 20 branches and above:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Total Priority Sector:<\/strong>&nbsp;40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.<\/li>\n\n\n\n<li><strong>Agriculture:<\/strong>&nbsp;18% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, with a target of 8% specifically for Small and Marginal Farmers.<\/li>\n\n\n\n<li><strong>Micro Enterprises:<\/strong>&nbsp;7.5% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure.<\/li>\n\n\n\n<li><strong>Advances to Weaker Sections:<\/strong>&nbsp;12% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Foreign Banks with less than 20 branches:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Total Priority Sector:<\/strong>&nbsp;40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.<\/li>\n\n\n\n<li>Out of the total, up to 32% can be in the form of lending to exports, and not less than 8% should be allocated to any other priority sector.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Regional Rural Banks:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Total Priority Sector:<\/strong>&nbsp;75% of Adjusted Net Bank Credit (ANBC).<\/li>\n\n\n\n<li>However, lending to Medium Enterprises, Social Infrastructure, and Renewable Energy is considered for priority sector achievement only up to 15% of ANBC.<\/li>\n\n\n\n<li><strong>Agriculture:<\/strong>&nbsp;18% of ANBC.<\/li>\n\n\n\n<li><strong>Micro Enterprises:<\/strong>&nbsp;7.5% of ANBC.<\/li>\n\n\n\n<li><strong>Advances to Weaker Sections:<\/strong>&nbsp;15% of ANBC.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Small Finance Banks:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Total Priority Sector:<\/strong>&nbsp;75% of Adjusted Net Bank Credit (ANBC).<\/li>\n\n\n\n<li><strong>Agriculture:<\/strong>&nbsp;18% of ANBC.<\/li>\n\n\n\n<li><strong>Micro Enterprises:<\/strong>&nbsp;7.5% of ANBC.<\/li>\n\n\n\n<li><strong>Advances to Weaker Sections:<\/strong>&nbsp;12% of ANBC.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Priority Sector Lending (PSL) targets are designed to ensure that banks contribute to the development of specific sectors crucial for the overall economic growth and social well-being of the country.<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"priority-sector-lending-certificates-pslcs\">Priority Sector Lending Certificates (PSLCs):<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Priority Sector Lending Certificates (PSLCs) are a mechanism to&nbsp;<strong>enable banks to achieve the priority sector lending target<\/strong>&nbsp;and sub-targets by purchase of these instruments in the event of shortfall.<\/li>\n\n\n\n<li>This also&nbsp;<strong>incentivizes surplus banks as it allows them to sell their excess achievement over targets thereby enhancing lending to the categories under priority sector<\/strong>.<\/li>\n\n\n\n<li>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.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Answer: (d) All of the above Priority Sector Lending: Weaker sections under Priority sector Priority sector loans to the following borrowers will be considered under Weaker Sections category Sl.No Category 1. Small and Marginal Farmers 2. Artisans, village and cottage industries where individual credit limits do not exceed Rs 1 lakh 3. Beneficiaries under Government&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[60],"class_list":["post-1982","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-60"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":60,"label":"2013"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1982"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1982\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1982"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}