Priority sector lending is an important role given by the Reserve Bank of India(RBI). This aspect is used to give any loans in different ways in the below sectors. This lending is helpful to all people who need the amount to develop their dreams.
They provide a specific portion of bank lending to a few specific sectors. As we know the sectors are
- Agriculture –
The loans are availed by a farmer to activities like animal farming and pisciculture or purchase of land or agricultural tools. The loan is of the 7% p.a.and loan amount is between zero to 4 percent. And farmers can pay the loan within one year or renew their loan with paying their interest. Here farmers lend the money from banks.
- Micro, Small and Medium Enterprise –
we can say it is as MSME and these loans are assured for expansion of business and setting of business and the loans are given by interest as the bank. For microloans are for shares developed in countries.
- Export Credit –
It is a loan given to goods that can export by the company to other states or countries with the help of credit.
- Education –
Education loan is given to students who are studying higher studies in our country or other countries. The loan is given to students by keeping her/his father’s assets as the security and the interest is of 0.75 to 1 rupee and it is for particular studying of students and if they complete studying the loan will increase the interest and they should renewal as per their availability.
- Housing –
The loan is provided if they want to construct a new house. And these loan is applicable not only for houses for also toilets which are constructed by government rules.
- Social Infrastructure-
The loan is given to factories that are providing food or preparing chemicals for any use of society or any medical assessments. The loan starts are provided of 10 lakhs.
- Renewable Energy-
In this long term loans are provided Power Generation Projects based on renewable energy and is provided for solar panels project kept by any organization or a company.
and so on.
There are of two types
- Priority sector lending is to credit to these sectors and segments
- Non-priority sector lending is towards financial instructions
- It is started in the year 1967 and started by the prime minister and finance minister.
- RBI extends lending to small finance banks.
Priority sector lending provides certificates to mechanism enable banks to achieve the target which has they kept before.
Priority sector lending certificates are more important to banks while they meet their obligations in India.
The priority sector lending keeps the target of 2 percent of Adjusted Net Bank Credit(ANBC) each year from 2016-17 to 2019-20 has to be achieved by lending to sectors other imports than exports.
The sector of the economy which may not get timely and adequate credit means Priority sector lending.
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