Priority Sector Lending

The Draft Technical Paper on Review of Priority Sector Lending, prepared by the Internal Working Group set up in Reserve Bank under the chairmanship of Shri C. S. Murthy, Chief General Manager-in-Charge, Rural Planning and Credit Department, was placed on the RBI website on September 30, 2005 for public opinion. Subsequently, on November 8, 2005 one subparagraph has been added under paragraph 6.10 of the Technical Paper.

DRAFT TECHNICAL PAPER BY THE INTERNAL WORKING GROUP ON PRIORITY SECTOR LENDING

This Draft Technical paper does not necessarily reflect the views of Reserve Bank of India

SEPTEMBER 2005

RESERVE BANK OF INDIA RURAL PLANNING AND CREDIT DEPARTMENT CENTRAL OFFICE MUMBAI

CONTENTS
Sr. No. 1 Section 1 Introductory Particulars

2

Section 2

Directed Lending: International Experience

3

Section 3

Genesis and evolution of Priority Sector in India

4

Section 4

An Analysis of Trends in Priority Sector Lending by banks in India

5

Section 5

Priority Sector Lending and Inter-Bank Participation Certificates

6

Section 6

Review of Priority Sector Lending Policy 7

Section 7

Summary of Options

8

Annexure 1

Recommendations of Earlier Committees and Action Taken

9

Annexure 2

Classification of Priority Sector Advances

10

Annexure 3

Scheduled Commercial Banks’ Advances Under Priority Sector

11

Annexure 4

Outstanding Advances of Scheduled Commercial Banks to Agriculture Scheduled Commercial Banks Advances to Small Scale Industries, Industrial Estates and Road and Water Transport Operators Advances to the Priority Sector by Public Sector Banks

12

Annexure 5

13

Annexure 6

14

Annexure 7

Advances to the Priority Sector by Indian Private Sector Banks

15

Annexure 8

Advances to the Priority Sector by Foreign Banks

16

Annexure 9

Scheduled Commercial Banks Advances under Priority Sector : 2002 and 2003

17

Annexure 10

Composition of