Priority

Click Here to access the Mahile E-Haat Website of Ministry of Women & Child Development

  

PRIORITY SECTOR LENDING

Priority sector lending is aimed to ensure adequate credit flow to those sectors of the society/ economy that impact large segments of population, the weaker section and employment sensitive sectors like Agriculture, Micro and Small Enterprises, Education and Housing Loan etc.

 

CATEGORIES UNDER PRIORITY SECTOR :

(i) Agriculture

(ii) Micro, Small and Medium Enterprises

(iii) Export Credit

(iv) Education

(v) Housing

(vi) Social Infrastructure

(vii) Renewable Energy

(viii) Others

 

Various purposes/activities under Priority Sector Credit for which credit is available from the Bank:


1. Agriculture:

1.1 Farm Credit

A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual farmers, directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will include:

 

(i) Crop loans which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.

 

(ii) Medium and long-term loans for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)

 

(iii) Loans for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm produce.

 

(iv) Loans to farmers up to Rs. 50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.

 

(v) Loans to distressed farmers indebted to non-institutional lenders.

 

(vi) Loans to farmers under the Kisan Credit Card Scheme.

 

(vii) Loans to small and marginal farmers for purchase of land for agricultural purposes.

 

B. Loans to corporate farmers, farmers' producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of Rs. 2 crore per borrower. This will include:

 

(i) Crop loans which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.

 

(ii) Medium and long-term loans for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)

 

(iii) Loans for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm produce.

 

(iv) Loans up to Rs. 50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.

1.2 Agriculture Infrastructure

i) Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage units/ cold storage chains designed to store agriculture produce/products, irrespective of their location.

 

 

 

 

ii) Soil conservation and watershed development.

 

iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi composting.

 

For the above loans, an aggregate sanctioned limit of Rs.100 crore per borrower from the banking system applies.

1.3 Ancillary  Activities

(i) Loans up to Rs.5 crore to co-operative societies of farmers for disposing of the produce of members.

 

(ii) Loans for setting up of Agriclinics and Agribusiness Centres.

 

(iii) Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs.100 crore per borrower from the banking system.

 

(iv) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.

 

(v) Loans sanctioned by banks to MFIs for on-lending to agriculture sector.

 

2. Micro, Small and Medium Enterprises (MSMEs)

2.1. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006 are as under:-

Manufacture Sector

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 plant and Machinery

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

 

Bank loans to Micro, Small and Medium Enterprises, for both manufacturing and service sectors are eligible to be classified under the priority sector as per the following norms:

2.2. Manufacturing Enterprises

The Micro, Small and Medium Enterprises engaged in the manufacture or production of goods to any industry specified in the first schedule to the Industries (Development and 9 Regulation) Act, 1951 and as notified by the Government from time to time. The Manufacturing Enterprises are defined in terms of investment in plant and machinery.


2.3. Service Enterprises

Bank loans up to 5 crore per unit to Micro and Small Enterprises and Rs.10 crore to Medium Enterprises engaged in providing or rendering of services and defined in terms of investment in equipment under MSMED Act, 2006.


2.4. Khadi and Village Industries Sector (KVI)

All loans to units in the KVI sector will be eligible for classification under the sub-target of 7 percent /7.5 percent prescribed for Micro Enterprises under priority sector.

 

2.5. Other Finance to MSMEs

 

(i) Loans to entities involved in assisting the decentralized sector in the supply of inputs to and marketing of outputs of artisans, village and cottage industries.

  

(ii) Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries.

 

(iii) Loans sanctioned by banks to MFIs for on-lending to MSME sector as per the conditions specified in paragraph IX of this circular.

 

(iv) Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit Card, and Weaver’s Card etc. in existence and catering to the non-farm entrepreneurial credit needs of individuals).

3. Export Credit

The Export Credit extended as per the details below would be classified as priority sector.

 

Domestic banks

Foreign banks with 20 branches and above

Foreign banks with less than 20 branches

Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, effective from April 1, 2015 subject to a sanctioned limit of Rs.25 crore per borrower to units having turnover of up to Rs.100 crore.

Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, effective from April 1, 2017 (As per their approved plans, foreign banks with 20 branches and above are allowed to count certain percentage of export credit limit as priority sector till March 2016)

Export credit will be allowed up to 32 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher


Export credit includes pre-shipment and post shipment export credit (excluding off-balance sheet items) as defined in Master Circular on Rupee / Foreign Currency Export Credit and Customer Service to Exporters issued by our Department of Banking Regulation.

4. Education

Loans to individuals for educational purposes including vocational courses upto      Rs. 10 lakh irrespective of the sanctioned amount will be considered as eligible for priority sector.

 

5. Housing

 

(i) 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 provided the overall cost of the dwelling unit in the metropolitan centre and at other centres should not exceed Rs. 35 lakh and Rs. 25 lakh respectively. The housing loans to banks’ own employees will be excluded.

 

(ii) Loans for repairs to damaged dwelling units of families up to Rs. 5 lakh in metropolitan centres and up to Rs. 2 lakh in other centres.

 

(iii) Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to a ceiling of Rs. 10 lakh per dwelling unit.

(iv) The loans sanctioned by banks for housing projects exclusively for the purpose of construction of houses for economically weaker sections and low income groups, the total cost of which does not exceed Rs. 10 lakh per dwelling unit. For the purpose of identifying the economically weaker sections and low income groups, the family income limit of Rs. 2 lakh per annum, irrespective of the location, is prescribed.

 

(v) Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of Rs. 10 lakh per borrower.

 

The eligibility under priority sector loans to HFCs is restricted to five percent of the individual bank’s total priority sector lending, on an ongoing basis. The maturity of bank loans should be co-terminus with average maturity of loans extended by HFCs. Banks should maintain necessary borrower-wise details of the underlying portfolio.

 

(vi) Outstanding deposits with NHB on account of priority sector shortfall.


 

6. Social infrastructure

 

Bank loans up to a limit of Rs. 5 crore per borrower for building social infrastructure for activities namely schools, health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.

 

7. Renewable Energy

 

Bank loans up to a limit of Rs. 15 crore to borrowers for purposes like solar based power generators, biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities Viz. Street lighting systems, and remote village electrification. For individual households, the loan limit will be Rs. 10 lakh per borrower.

 

8. Others

 

8.1. Loans not exceeding Rs. 50,000/- per borrower provided directly by banks to individuals and their SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed Rs. 100,000/- and for non-rural areas it does not exceed Rs. 1,60,000/-.

 

8.2. Loans to distressed persons [other than farmers already included under III (1.1) A (v)] not exceeding Rs. 100,000/- per borrower to prepay their debt to non-institutional lenders.

 

8.3. Overdrafts extended by banks upto Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts provided the borrowers household annual income does not exceed Rs. 100,000/- for rural areas and Rs. 1,60,000/- for non-rural areas.

 

8.4. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations.

 

Weaker Sections:

 

Priority sector loans to the following borrowers will be considered under Weaker Sections category:-

No.

 

Category

1

Small and Marginal Farmers.

2

Artisans, village and cottage industries where individual credit limits do not exceed Rs. 1 lakh

3

Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS).

4

Scheduled Castes and Scheduled Tribes

5

Beneficiaries of Differential Rate of Interest (DRI) scheme.

6

Self Help Groups.

7

Distressed farmers indebted to non-institutional lenders

8

Distressed persons other than farmers, with loan amount not exceeding     Rs. 1 lakh per borrower to prepay their debt to non-institutional lenders.

9

Individual women beneficiaries up to Rs. 1 lakh per borrower.

10

Persons with disabilities

11

Overdrafts upto Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts, provided the borrowers household annual income does not exceed
Rs. 100,000/- for rural areas and Rs. 1,60,000/- for non-rural areas.

12

Minority communities as may be notified by Government of India from time to time

 

 

 

Click Here to Register/Track for Online Agriculture Loan

 

show