PRIORITY SECTOR

                                                              

 PRIORITY SECTOR LOANS

1: AGRICULTURE

2: MICRO SMALL AND SERVICE ENTERPRISES

3: EXPORT CREDIT

4: EDUCATION LOAN

5: HOUSING

6: SOCIAL INFRASTRUCTURE

7: RENEWAL ENERGY

8:  OTHER PRIORITY SECTOR

                                       WEAKER SECTION

·        SMALL & MARGINAL FARMERS : LAND HOLDING UPTO 2 HECTARE OR 5 ACRE.

·        VILLAGE & COTTAGE INDUSTRY: MAX LOAN PER BORROWER 1 LAKH

·        WOMEN BENEFICIARY: MAX LOAN 1 LAKH

·        S.H.G: LOAN TO BE SHG

·        LOAN TO BE DISABLED PERSON

·        OVERDRAFT UPTO 5,000/- UNDER JANDHAN YOJNA.

·        SC/ST BENEFICIARY

·        MINORITY COMMUNITY BENEFICIARY

·        LOAN TO POOR PERSON FOR REPAYMENT OF LOAN TO MAONEYLENDERS.

·        D.R.I SCHEMES

·        NRLM BENEFICIARY

·        NULM BENEFICIARY

·        SRMS BENEFICIARY

ALL OF THES ARE PART OF WEAKER SECTION.

                            MINORITY COMMUNITY

IN INDIA-

·        MUSLIMS

·        CHRISTIANS

·        JOHRASTIANS (PARSI)

·        SIKKHS

·        BAUDDH

·        JAIN

                          TARGETS

Targets are linked to ANBC or CEOBE whichever is higher.

Where ANBC is adjusted bank net credit.

CEOBE means credit equivalent of off balance sheet exposure.

 Off balance sheet exposure

·        Bank guarantee

·        Letter of credit

·        Forward credit

    

Targets for domestic banks & foreign banks more than 20 branches in INDIA

·      40% of ANBC or CEOBE.

·        Agriculture target : 18% of ANBC or CEOBE

·        10% OF ANBC or CEOBE (Weaker Section)

·        Small & marginal farmers target : 8% OF ANBC or CEOBE

·        MICRO & Small enterprises : 7.5% of ANBC OR CEOBE.

Targets for foreign banks less than 20 branches in INDIA

Priority sector : 14% of ANBC or CEOBE..

NOTE :  Non achievement of targets by domestic commercial banks and foreign banks, shortfall to be deposited in RIDF. Or any other fund described by RBI.

R.I.D.F : Rural Infrastructure development fund , maintained with NABARD.

Targets for R.R.B

·        75% of Total advance (Priority Sector)

·        15% of total advance (weaker section)

·        18% of total advance (agriculture)

·        8% of total advance (small & marginal farmers)

·        7.5% of total advance (Micro & Small enterprises)

·        Other targets for domestic commercial banks

·        Women beneficiary: 5% of ANBC

·        Minority community : 15% of priority sector

·        No target of DRI advance as percentage of ANBC.

·        No target for export credit.

·        Min 40% of DRI advance to SC/ST

·        Min 2/3^rd of DRI advance to rural and semiurban branches.

·        100% of loans under PMEGP scheme should be given to micro enterprises.

·        Min 50% of subsidy under PMEGP should be routed through rural areas.

·        NOTE : LOANS under PMEGP , not part of weaker section.

·        General terms & conditions of P.S

·        Loans upto 25,000.00 under priority sector –

·        No margin, no collateral security, no processing fees, no penal interest.

·        Loan application disposal norms to be decided by banks.

Agriculture Advance

·        Three category of agri. Advance

·        Farm credit

·        Agriculture infrastructure

·        Ancillary activity in agriculture

·        Farm credit : Loan to farmer for agriculture & allied activity including production credit (crop loan)

·        Farm mechanization

·        Irrigation.

·        If loan given against stored produced or ware house receipt or produced marketing loan is then it will be considered as Farm credit.

·        Maximum loan : Rs 50 lakh.

·        Maximum period : 12 Months.

·        Loan to small and marginal farmers for purchase of agricultural land.

·        Loan to poor farmers for repayment of loan to money lenders, it is called RURAL DEBT SWAP.

·        Loans under KCC.

·        Loan to corporate or partnership for agriculture or allied activity – Max. loan 2 crore.

·        If loan is more than 2 crore  entire amount will become non priority sector.

Agriculture Infrastructure

·        Construction of ware house or cold storage.

·        Production of seeds.

·        Tissue culture

·        Soil conservation

·        Note: anywhere in INDIA – Max. loan : 100 crore per borrower from banking system.

·         

·        Ancillary activity in agriculture :

·        Loan to agriclinic or agribusiness centre.

·        Loan to agro food processing industry – Max loan per borrower = 100 crore

·        Loan to co-operative leisures – Max. loan 5 crore per borrower

·        Deposits in RIDF

·        Loan to micro finance industries

·        Terms & conditions for agriculture advance.

·        No coll. Security , no margin for loans upto 1 lakh.

·        No dues certificate not to be taken irrespective of amount of loan.

·        service area approach discontinued but still continuing in govt. sponsored schemes.

·        Marginal farmers- land holding upto 1 hectare or 2.5 acre.

·        Small farmers – land holding upto 2 hectare or 5 acre.

CROP LOANS

·        Short duration crop : crop season upto 12 months.

·        Long duration crop : crop season more than 12 months.

·        Decision regarding short duration or long duration crop taken by SLBC (state level banker’s committee.)

·        RABI CROP : OCTOBER TO MARCH- wheat & gram are main crops.

·        KHARIF CROP : APRIL TO SEPT. peddy is main crop.

·        Scale of finance per acre is decided by district technical committee.

·        Mixed Farming : agriculture with animal husbandry simultaneously is called mixed farming. (kheti k sath sath pashupalan ka bhi kaam kiya jaye.)

·        Mix cropping : more than one crops are grown in one time is called mix cropping.

·        Interest subvention scheme

·        Intt. Subvention is available for loans upto 3 lakh.

·        Crop loans upto 3 lakh given by banks @ 7%.

·        Govt. will give intt. Subvention of 2% to the bank.

·        Subvention will be claimed half yearly as on 31^st March & 30^th September.

·        Additional subvention of 3% to the farmer for prompt repayment of the loan.

·        Subvention is not available for overdue loans.

KISAN CREDIT CARD :

Purpose :

·        KCC can be used for production credit (crop loan)

·        KCC can be used for consumption loan.

·        Loan against store produced (produced marketing loan)

·        Maintenance of farm assets

·        Investment credit (tractor)

·        Validity of KCC : as per bank’s descrition (generally 5 years)

·        Fixation of limits : crop loan = land holding * scale of finance per acre

·        Consumption loan : 10% of crop loan

·        Loan for maintenance of farm assets : 20% of the crop loan

·        Total limit : 130% of crop loan

·        KCC limit will be increased every year by 10%

·        Credit balance in kcc interests as at saving rate

·        Personal accident insurance scheme for kcc holders, premium will be borne by bank & borrower in the ratio of 2:1

PMFBY  (Pradhanmantri Fasal Bima Yojna)

·        It is insurance of crops

·        Risks which are not covered – war risk & nuclear risk

·        Insurance premium :

·        Rabi fasal : 1.5% of insurance amount

·        Kharif fasal : 2% of insurance amount

·        Annual crop : 5% of insurance amount

·        LOAN To Agriclinic & Agribusiness centres

·        Agriclinic & agribusiness centres are set up by diplomaholders, graduates or post graduates in agriculture.

·        No margin , no collateral security for loans upto 5 lakh.

·        Max project cost per person = 20 lakh. But in highly successful case it may be 25 lakh.

·        Max project cost for group 1 crore.

·        Repayment period : 5 to 10 years

·        Subsidy to agriclinic provided by NABARD.

·        SUBSIDY : SC/ST, WOMEN, NORTH EAST, HILL AREA : 44% Of project cost

·        In all other cases subsidy will be 36% of project cost

·                 ALLIED AGRICULTURE ACTIVITY

·        Sericulture- related to silk

·        Pisciculture – related to fish

·        Apiculture – related to bee keeping

·        Apriculture – related to mushrooms

·        Olariculture – related to vegetables

·        Floriculture – related to flowers

·        Horticulture – related to fruits

·        Green revolution – related to woodgrain

·        White revolution – related to milk

·        Blue revolution – related to fish

·        Yellow revolution – related to oil seeds & pulses

·            SELF HELP GROUP(S.H.G)

·        Group of below poverty line persons

·        Objective : mutual help & mutual co-operation

·        Development of saving habbits

·        Q: what is not the major objective?

·        Making super profits

·        Raising loan from the banks

·        Members : 10 to 20

·        In difficult areas and group of disabled persons : 5 to 20 members

·        Bank’s finance : after 6 months of group formation

·        Max 30% members can be above poverty line

·        Above poverty line, not eligible for subsidy

·                  Joint liability group

·        Members : 4 to 10

·        Objective : to raise loan from the banks

·        Max loan per member = 50 thousands (50,000.00)

·        Max loan per group = 5 lakh (5,00,000.00)

LINKS FOR MORE, CLICK BELOW

PRIORITY SECTOR WIKIPEDIA
PRIORITY SECTOR FAQs BY RBI