Reserve Bank of India Relaxes Priority Sector Lending Rule For Banks

Posted on:14 Feb 2018 12:17:12
Reserve Bank of India Relaxes Priority Sector Lending Rule For Banks
14 February 2018 Current Affairs: Reserve Bank of India made banks' priority sector norms lenient by saying that all loans to micro small and medium enterprises (MSME) will henceforth qualify as priority sector lending.

This was a long time demand from banks. 

Till date, loans up to Rs 10 crore per MSME borrower was considered for priority sector calculation.

The sub-target for bank lending to the micro enterprises has been 7.50 percent of adjusted net bank credit or credit equivalent amount of off-balance sheet exposure, whichever is higher.

Foreign banks will also have to follow 8% sub-target for lending to the small and marginal farmers.
Reserve Bank of India made banks' priority sector norms lenient by saying that all loans to micro small and medium enterprises (MSME) will henceforth qualify as priority sector lending.

This was a long time demand from banks. 

Till date, loans up to Rs 10 crore per MSME borrower was considered for priority sector calculation.

The sub-target for bank lending to the micro enterprises has been 7.50 percent of adjusted net bank credit or credit equivalent amount of off-balance sheet exposure, whichever is higher.

Foreign banks will also have to follow 8% sub-target for lending to the small and marginal farmers.

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