Industry

RBI panel widens scope for priority sector lending

The Reserve Bank of India (RBI) on Monday said loans to sanitation, health care and drinking water facilities and renewable energy would come under the priority sector ambit, as would incremental loans made to exports, with certain ceilings.

“The target for lending to the redefined priority sector is retained uniformly at 40 per cent of adjusted net bank credit (ANBC) or credit equivalent of off-balance sheet exposure (CEOBE), whichever is higher, for all scheduled commercial banks,” said an RBI panel report on revisiting the existing priority sector guidelines. “All foreign banks (irrespective of number of branches they have) may be brought on a par with domestic banks and the same target/sub-targets may be made applicable to them,” the report added.

It suggested foreign banks with 20 and above branches may be given time up to March, 2018, in terms of extant guidelines and submit their revised action plans. Other foreign banks, that is, with less than 20 branches, may be given time up to March, 2020, to comply with the revised targets as per action plans submitted by them and approved by the RBI.

The target for lending to agriculture has been retained at 18 per cent of ANBC. But a sub-target of 8 per cent of ANBC has been recommended for small and marginal farmers to be achieved in a phased manner.

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Printable version | May 10, 2021 12:46:57 AM | https://www.thehindu.com/business/Industry/rbi-panel-widens-scope-for-priority-sector-lending/article6952225.ece

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