Inko toh LOAN dena hi padega kyunki BOSS (RBI) ka nirdesh hai-PRIORITY SECTOR LENDING

Dear readers, today we are providing you the highlights of the one of the most important topic of General awareness section, i.e. the Priority Sector Lending. It is very relevant for all the upcoming banking exams, IBPS/SBI/RRB etc. and also being asked in the banking interviews. 

Highlights of PSL

It means provide credit to the needy sectors of the society. The sectors are:

• Agriculture

• Micro and Small Enterprises

• Education

• Housing

• Export

• Weaker Sections

• Social Infrastructure

• Renewable Energy

Targets under PSL

• Agriculture: 18 percent of ANBC. Out of this 18 percent, a target of 8 percent of ANBC is for Small and Marginal Farmers, to be achieved in a phased manner i.e., 7 per cent by March 2016 and 8 per cent by March 2017.

• Weaker Sections: 10 percent of ANBC.

• Micro Enterprises: 7.5 percent of ANBC has been prescribed for Micro Enterprises, to be achieved in a phased manner i.e. 7 percent by March 2016 and 7.5 percent by March 2017.

• Overall PSL Target for Domestic Bank/Foreign Bank with more than 20 Branches:  40 percent of Adjusted Net Bank Credit.

• Overall PSL Target for Foreign Bank with less than 20 Branches: 40 percent of Adjusted Net Bank Credit to be achieved in a phased manner-

2015-16	32
2016-17	34
2017-18	36
2018-19	38
2019-20	40

Categorization of MSME according to MSME ACT 2006

Manufacturing Sector (Goods)

Enterprises	Investment in plant and machinery
Micro Enterprises	Does not exceed twenty five lakh rupees
Small Enterprises	More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises	More than five crore rupees but does not exceed ten crore rupees

Service Sector

Enterprises	Investment in equipment
Micro Enterprises	Does not exceed ten lakh rupees
Small Enterprises	More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises	More than two crore rupees but does not exceed five crore rupees

Other Facts:

• Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a landholding of more than 1 hectare and upto 2 hectares are considered as Small Farmers.

• Scheduled Commercial Banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD.

• For Renewable Energy, bank loans up to a limit of Rs.15 crore to borrowers for purposes like solar based power generators, etc. For individual households, the loan limit will be Rs.10 lakh per borrower.

• For Housing, banks can provide loans to individuals up to Rs. 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rs. 20 lakh in other centres for purchase/construction of a dwelling unit per family.

• Export credit will be allowed up to 32 percent of ANBC for Foreign banks with less than 20 branches in India. 

• For Education, banks can provide loans to individuals for educational purposes including vocational courses upto Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad.

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