COMMERCIAL BANKS FINANCING PRIORITY SECTOR

Author (s) : Mrs.P.Epsiba & Mrs.N.Rahamathunisha

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Abstract :
Priority sector lending is a scheme guided by government and RBI to commercial banks  about the obligatory deployment of credit to preferred and desired sectors and sections of the economy. Preferred sectors and sections agriculture, small scale industries, small businessman, education,housing finance, etc. and sections of the society are below income persons. The object behind PSL( Priority Sector Lending) is equitable and sustainable economic development in the desired direction. To attain the said objectives, banks were nationalized in India in 1969. Since in this scheme banks were entrusted to fulfill some targets and sub-targets of deployment of credit such as 40 percent for domestic banks and 32 percent for foreign banks was fixed for priority sector lending of their total advances. Though public sector banks have progressed remarkably and achieved their targets, private sector banks are lagging behind in this respect. Now on invent of some new schemes like PSL banks in India are shaping the economy and are providing an impetus to the economy. Despite various qualities and goodness, the scheme is not free from problems. The author has made an attempt through this treatise to highlight these problems and suggested some ideas for the effective formation of the scheme. The overall future of this scheme in India is bright but needs a regular review process.

Keywords : Credit deployment, Microcredit, Nationalization, Non-performing assets, vital sectors of the economy, weaker sections.

Conference Date : 17/09/2021

Pages : 56

Paper ID : IESMDT54