Priority Sector Lending for Urban Co-operative Banks (UCBs)
The Reserve Bank of India (RBI) has issued a master circular outlining the guidelines for priority sector lending for Urban Co-operative Banks (UCBs).
The priority sector consists of four categories: Agriculture, Micro and Small Enterprises (MSE), Advances to Weaker Sections, and Others.
Targets/Sub-targets:
Total Priority Sector: 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher.
Total Agriculture: 18% of ANBC or CEOBE, whichever is higher.
Micro and Small Enterprises (MSE): 7.5% of ANBC or CEOBE, whichever is higher.
Advances to Weaker Sections: 10% of ANBC or CEOBE, whichever is higher.
Description of Categories:
Agriculture:
Direct Agriculture: Loans to individuals, joint farming, and farmers’ producer organizations.
Indirect Agriculture: Loans to corporates, partnership firms, and institutions engaged in agriculture and allied activities.
Micro and Small Enterprises (MSE):
Manufacturing Sector: Enterprises with investment in plant and machinery up to ₹10 crore and turnover up to ₹50 crore.
Service Sector: Enterprises with investment in equipment up to ₹4 crore and turnover up to ₹20 crore.
Direct Finance: Loans to MSEs for manufacturing, processing, or service activities.
Chat with the Master Circular: