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COVER STORY

PRIORITY SECTOR
LENDING:
COMPLIANCE OR
BUSINESS
OPPORTUNITY?

Introduction in 1971. In November 1974, banks were advised to raise
the share of priority sectors in their aggregate advances
The sectors which provide the basic needs of a mankind to the level of 33 1/3 % by March 1979. In March 1980, all
(i.e. food, shelter and clothing) and are crucial for the commercial banks were advised to achieve the target
development of the economy are 'priority sectors'. These under priority sector lending 40 percent of aggregate
sectors are not only for the Government, RBI or Bank but bank advances by 1985.
also for priority of each & every individual. These sectors
need not require any benchmark stipulation by the Categories under priority sector
regulator.
a. Agriculture
The description of the priority sectors were formalized in
1972 on the basis of the reports submitted by the informal b. Micro,Small and Medium Enterprises
study group on statistics relating to advances of the
priority sectors constituted by Reserve Bank of India (RBI) c. Education

About the author d. Housing

Hrishikesh Mishra e. Export Credit (Not a separate category. However
Chief Manager (Faculty) export advance under agriculture will be treated as
Staff College, Union Bank of India Agriculture. Similarly, export under MSE will be
Bengaluru grouped under MSE)

f. Social Infrastructure

g. Renewable Energy

h. Others

BANKING FINANCE | FEBRUARY | 2016 | 35

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