TREND OF PRIORITY SECTOR LENDINGS BY INDIAN COMMERCIAL BANKS

Author (s) : Mrs.ATamilselvi & Mrs.M.Thilagam

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Abstract :
The priority sector means those sectors which the Government of India and Reserve bank of India. Consider are important for the development of the basic needs of the country and are to be given priority over the sectors. On lending means a loan sanctioned by banks to eligible intermediaries for onward lending for the creation of priority sector assets. The average maturity of priority sector assets thus created by the eligible intermediaries should be co-terminus with the maturity of the bank loan. All other expressions, unless defined herein, shall have the same meaning as has been assigned to them under the Banking Regulations Act, 1949 or the Reserve Bank of India Act, 1934 or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be banks must ensure that loans extended under priority sector are for approved purposes and the end user is continuously monitored. The banks should put in place proper internal controls and systems in this regard. The priority sector can be divided into- (i) Agriculture (ii)Micro and Small Enterprise (iii)Export credit (iv) Education(v) Housing (vi) Social infrastructure(vii) Renewable Energy (viii) others. The rate of interest on the same is also very low. Lending funds to priority sectors create a profusion of job opportunities as well as a small business can be developed with the help of the same. The present paper has been made to highlight and assesses the two sectors of bank namely public sector and private sector role in the priority sector lending. To study finds and concludes public sector banks have significantly contributed more in PSL than private sector banks.

Keywords : Priority Sector , Priority Sector Lending, Micro Small and Medium Enterprises.

Conference Date : 17/09/2021

Pages : 55

Paper ID : IESMDT53