Master Directions for Priority Sector Lending
The Reserve Bank of India has issued Master Directions for Priority Sector Lending, which outlines the categories, targets, and classification for priority sector lending.
The directions are applicable to all commercial banks, including Regional Rural Banks, Small Finance Banks, Local Area Banks, and Primary (Urban) Co-operative Banks, excluding Salary Earners’ Banks.
Categories and Targets
The priority sector categories include:
- Domestic commercial banks
- Foreign banks with 20 branches or more
- Foreign banks with less than 20 branches
The targets and sub-targets for priority sector lending are as follows:
- 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher, for domestic commercial banks
- 32% of ANBC or CEOBE, whichever is higher, for foreign banks with 20 branches or more
- 30% of ANBC or CEOBE, whichever is higher, for foreign banks with less than 20 branches
Eligible Categories
The eligible categories under priority sector lending include:
- Agriculture
- Micro, Small and Medium Enterprises (MSMEs)
- Education
- Housing
- Social Infrastructure
- Renewable Energy
- Others
The directions also provide for miscellaneous provisions, including reporting requirements and penalties for non-compliance.
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