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Mitigation Of Financial Hardship Of Common Man

Posted on 11 August 2010,    
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Mitigation Of Financial Hardship Of Common Man

The Reserve Bank of India (RBI) has issued directives to banks on lending under Priority Sector. As per extant guidelines of RBI on Priority Sector Lending (PSL) (available at, the Domestic Commercial Banks have to lend 40% of their Adjusted Net Bank Credit (ANBC or credit equivalent amount of off-balance sheet exposure, whichever is higher) under PSL.  For the foreign banks, this target is 32% of ANBC.


          Within overall PSL target, Domestic Scheduled Commercial Banks have to lend 18% of ANBC to agriculture sector and 10% to weaker sections comprising of small & marginal farmers, artisans, SCs & STs, advances to Self Help Groups (SHGs), advance under Government sponsored schemes such asSwarnjayanti Gram Swarojgar Yojana (SGSY),Differntial Rate of Interest (DRI), Swarna JayantiSahari Rojgar Yojana (SJSRY) etc. and loans to distressed poor to prepay their debt to informal sector.


          As per RBI data (latest available), the total loans outstanding under PSL as on 31st March, 2009 under various sub targets was:


                                                                    (Rs. Incrore)


Loan outstanding as on 31st March, 2009

Overall PSL




Weaker Sections


Education Loans


Housing Loans


Micro and Small Enterprises


Source: RBI







Domestic Scheduled Commercial Banks having shortfall in lending to PSL target (40% of ANBC) and/ or agriculture lending target (18% of ANBC) and/ or weaker section lending target (10% of ANBC) are allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) with NABARD or Funds with other Financial Institutions, as specified by RBI.


This information was given by the Minister of State for Finance, Shri Namo Narain Meena in a written reply to an Unstarred Question raised inRajya Sabha today.



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