Page 36 - BANKING FINANCE FEBRUARY 2016 ONLINE

ARTICLE

Benchmark as per new Priority Sector encourage the new classes of entrepreneurs. The purpose
Guidelines of nationalization of banks is to develop the society by
giving them employment opportunity through banking
Sl No Parameter Benchmark system. In National Credit council meeting held in July
1968, it was emphasized that commercial banks should
1 Total Priority Sector Advances 40% of ANBC increase their involvement in financing priority sectors.

2 Total Agriculture 18% of ANBC There is great responsibility on all of us (Banker) as a
responsible citizen and officer of the society to contribute
W/W Small & Marginal Farmers 08% of ANBC for its overall development. It is not only sufficient to
sanction and disburse the loan to the customers but to
3 Advances to Weaker Section 10.00% of guide them for their utilization and diversification of their
activities so that everyone will contribute to the economy.
ANBC
Mahatma Gandhi had said, "Give a PIE to everyone". PIE
4 Lending to Women Beneficiaries 05.00% of stands for Production, Investment and Employment.
Banks can create an employment opportunity for every
ANBC individual in the society.

5 Lending to Micro Enterprises 7.50 % of

ANBC

6 Lending to Minority communities 15.00% of

Priority

Sector

Lending

Banks under RBI's strict directives has to achieve the MNCs of Tomorrow
benchmark fixed for the priority sector otherwise shortfall
in lending priority sector target/sub-target on the above Yesterday's DRI (Differential Rate of Interest i.e. lending
mentioned parameters, they will have to pay the penalty at the rate of 4% to the weaker section) borrowers are
in the form of parking the fund in the Rural Infrastructural today's big corporate and business conglomerates. These
Development Fund (RIDF) established with NABARD and are the result of timely and easy availability of finance.
other funds with NHB/SIDBI/other financial institutions as Therefore,the people of weaker section and priority
decided by RBI from time to time. sector lending will create many more business tycoons in
the years to come.
"A smaller margin in large number of units is equivalent to
higher margin in one unit,the future lies with those The successful MSMEs grow into large corporate with
companies who see the poor as their customers,fortune passage of time and there is every possibility that they
for business and opportunities lies at the bottom of the could be MNCs of tomorrow. It is the Banking Industry
Pyramid"- These statements were made by the renowned
management guru Prof. C K Prahlad which hold good for
all the time and are applicable for all the business
activities including banking industries.

On the basis of this theory many companies in the recent
past made a huge profit which is clearly visible in
marketing of various products and services.

The objective of nationalization of
Banks

One of the main objectives of nationalization of bank are
to provide timely and adequate credit facilities to
agriculture, weaker sections, small industries, etc and to

36 | 2016 | FEBRUARY | BANKING FINANCE

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