Page 43 - Banking Finance August 2021

ARTICLE

Agriculture 18 % of ANBC or CEOBE Not Applicable 18 % of ANBC or 18 % of ANBC or
whichever is higher CEOBE whichever CEOBE whichever is
is higher higher
Micro 7.5 % of ANBC or CEOBE Not Applicable 7.5 % of ANBC or 7.5 % of ANBC or
Enterprises whichever is higher CEOBE whichever CEOBE whichever is
is higher higher
Advances to 12 % of ANBC or CEOBE Not Applicable 15 % of ANBC or 12 % of ANBC or
Weaker Section whichever is higher CEOBE whichever CEOBE whichever is
is higher higher

The revised targets for small & marginal Farmers and weaker Micro Enterprises - 7.5 % of ANBC or CEOBE whichever is
section will be implemented in a phased manner as appended higher

Financial Year Small & Weaker Advances to Weaker Section -12 % of ANBC or CEOBE
Marginal Farmers Sections # whichever is higher
2020-2021 8% 10%
Source : www.rbi.org.in
2021-2022 9% 11%
2022-2023 9.5% 11.5% All scheduled commercial banks and foreign banks (with
2023-2024 10% 12% sizable presence in India) are mandated to set aside 40% of
their ANBC for lending to specified sectors like Agriculture,
Weaker section target for RRBs will continue to be 15% of MSMEs (Micro Small and Medium Enterprises), Export Credit,
Education, Housing, Social Infrastructure, renewable energy
ANBC (Adjusted Net Bank Credit) or CEOBE (Credit Equivalent
and other priority sectors.
to off-balance sheet exposure) whichever is higher
Regional Rural Banks, Small Finance Banks and Cooperative
The revised targets for Primary Urban Cooperative Banks shall
Banks are to lend 75% of their ANBC to Priority Sector. The
also be increased from 40% to 75 % of ANBC or CEOBE
idea behind this is to ensure that adequate institutional credit
whichever is higher in a phased manner as appended
reaches some of the vulnerable sector of the economy. The
revised guideline will enable better credit penetration to
Existing March March March March credit deficient area such as small and marginal farmers and
Target 31,2021 31,2022 31,2023 31,2024 other weaker sections along with boost credit to renewable
40% 45% 50% 60% 75% energy and Health Infrastructure. As per the new guideline
loans to farmers for installation of solar power plant for
solarisation of grid connected agricultural pumps and loan for
setting up Compressed Bio Gas plant have been included as
fresh categories eligible for finance under priority sector.

Any shortfall in lending to priority sector by banks shall be
contributed by them into Rural Infrastructure Development
Fund (RIDF) with NABARD and other funds with NABARD/
NHB/SIDBI/MUDRA etc as decided by the RBI.

The revised PSL guidelines will enable better credit
penetration to credit deficient areas, increase lending to small
and marginal farmers & weaker section and boost credit to
renewable energy and heath infrastructure. T

BANKING FINANCE | AUGUST | 2021 | 43