The Reserve Bank of India (RBI) Governor D. Subbarao, on Tuesday, said that the apex bank would review the priority sector lending guidelines, which was issued by the central bank on July 20.
During a RBI meeting with the bankers as part of its first quarter monetary policy review, foreign banks had raised some issues related to priority sector lending. These issues would be discussed with them, he said. The RBI would come out with its final decision within a month, he added
The RBI, in its final guidelines, said that foreign banks having 20 or more branches in the country would be brought on a par with domestic banks for priority sector lending targets in a phased manner over a maximum period of five years, starting April 1, 2013.
They were also asked to submit an action plan for achieving the targets over a specific timeframe to be approved by the RBI.
Foreign banks with less than 20 branches will have no sub-targets within the overall priority sector lending target of 32 per cent. This is expected to allow them to lend as per their core competence to any priority sector category.