Lok Sabha Question No. 1914 (UNSTARRED), answered on 2017-12-29
Subject: Priority Sector Lending
Ministry: FINANCE
Asked by: B.V. NAYAK

## 1914. Shri B.V.Naik

Will the Minister of FINANCE be pleased to state:

- (a) whether the most of the banks have failed to meet the targets of providing loans to Small Scale Industries (SSI) and agriculture sectors under Priority Sector Lending (PSL) across the country;
- (b) if so, the details thereof during the last three years, State/UT-wise including Karnataka;
- (c) the reasons cited by banks for not meeting the targets;
- (d) whether the Government has taken or propose to take remedial measures ensure that the PSL targets are met by all the banks in the country; and
- (e) if so, the details thereof; and

Government of India Department of Financial Services Ministry of finance LOK SABHA UNSTARRED QUESTION NO. 1914 TO BE ANSWERED ON THE 29 th  December, 2017, Pausha 8, 1939 (SAKA)

Priority Sector Lending

QUESTION

ANSWER (MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI SHIV PRATAP SHUKLA)

(a) to (e):  Reserve Bank of India (RBI) has issued Master Direction on Priority Sector Lending for Scheduled Commercial Banks(SCBs) {excluding Regional Rural Banks (RRBs)} dated 7 July 2016.

In the said Master Direction, a target of 18% of Adjusted Net Bank Credit (ANBC)   or Credit Equivalent of Off Balance-sheet Exposure(CEOBC), whichever is higher, has been prescribed for lending to agriculture category and a target of 7.50% of ANBC or CEOBC, whichever is higher, is applicable for lending to Micro Enterprises.

The number of banks not achieving the applicable targets for agriculture and micro enterprises respectively for the last three years is as below:

| Year       |   No. of banks falling short of applicable agriculture sub- target | No. of banks falling short of applicable Micro Enterprise sub-target #   |
|------------|--------------------------------------------------------------------|--------------------------------------------------------------------------|
| FY 2014-15 |                                                                 35 | NA #                                                                     |
| FY 2015-16 |                                                                 22 | 16                                                                       |
| FY 2016-17 |                                                                 24 | 21                                                                       |

## NA- Not Applicable

# The Micro Enterprise target was made applicable for SCBs in a phased manner, starting from 7% for FY 2015-16 and 7.50% for FY 2016-17 and onwards. The priority sector targets are applicable at bank level and not state-wise. However, the outstanding portfolio of banks under overall priority sector, agriculture and Micro and Small Enterprises for the last three years, state wise is placed at Annex .

As  per  Master  Directions  issued  by  RBI  on  Priority  Sector  Lending,  Scheduled  Commercial  Banks  having  any  shortfall  in  lending  to  priority  sector  shall  be  allocated  amounts  for  contribution  to  the  Rural  Infrastructure  Development  Fund  (RIDF)  established  with  NABARD  and  other  Funds  with NABARD/NHB/SIDBI/ MUDRA Ltd.  as decided by Government of India from time to time. The above funds with NABARD/ NHB/SIDBI/ MUDRA Ltd. have tenures ranging from 1 year to 7 years and the deposit rates are 2 to 4 percentage points lower than the Bank Rate bases on the extent of shortfall. The low deposit rates under the funds act as disincentive for the banks to default on their priority sector targets.

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| 17   | KARNATAK A     | 1838396895   | 845705252   | 559641399   |   2112833569 | 955571067    | 683094274    | 302943898   |   2028944920 | 890501112    | 721410114    |   310889866 |
|------|----------------|--------------|-------------|-------------|--------------|--------------|--------------|-------------|--------------|--------------|--------------|-------------|
| 18   | KERALA         | 1140404372   | 552239726   | 317607050   |   1252759444 | 541697588    | 390185513    | 160361315   |   1319922189 | 619704851    | 399012465    |   183894594 |
| 19   | LAKSHADW EEP   | 811364       | 56402       | 612092      |      1149156 | 158142       | 839578       | 159178      |       385412 | 69329        | 165874       |      158894 |
| 20   | MADHYA PRADESH | 925276271    | 436353711   | 342321855   |   1015942333 | 498592369    | 349420949    | 166095543   |   1144524510 | 575398585    | 378128526    |   188618909 |
| 21   | MAHARASH TRA   | 4441810487   | 1767649137  | 139944700 0 |   5732497566 | 252061763 2  | 184876745 3  | 586204780   |   6342899385 | 280455192 4  | 211198421 5  |   700988917 |
| 22   | MANIPUR        | 10316523     | 3331198     | 3980555     |     12140846 | 3822793      | 5033993      | 3314358     |     19819082 | 10867276     | 5653579      |     3839576 |
| 23   | MEGHALAY A     | 14032867     | 4082555     | 7176663     |     15807571 | 4613286      | 8477764      | 3850444     |     16754887 | 5719173      | 8081952      |     4143135 |
| 24   | MIZORAM        | 8264288      | 1323011     | 3378848     |      8442162 | 1422138      | 3910198      | 2578678     |      8737286 | 1357073      | 4065362      |     2695145 |
| 25   | NAGALAND       | 7418627      | 2528830     | 3709994     |      9094873 | 3013855      | 4896798      | 3276515     |      9933193 | 2760307      | 6047165      |     3729546 |
| 26   | ODISHA         | 325828280    | 105333625   | 157683611   |    384691743 | 127557385    | 191770863    | 99608102    |    411842981 | 138171655    | 206379561    |   114286932 |
| 27   | PUDUCHER RY    | 48004395     | 14886923    | 23362913    |     47685867 | 15516437     | 22005276     | 9769588     |     51441108 | 18604835     | 23419854     |    11034409 |
| 28   | PUNJAB         | 1079315468   | 547034694   | 443183496   |   1227411553 | 701409228    | 429310043    | 197139117   |   1229901656 | 697437162    | 427130163    |   199130127 |
| 29   | RAJASTHA N     | 1043418037   | 505651436   | 403315506   |   1210123021 | 607445068    | 451961765    | 229913430   |   1361088546 | 685718153    | 488893118    |   257779987 |
| 30   | SIKKIM         | 9112357      | 1253847     | 3989710     |      9928068 | 1660186      | 4677446      | 1842860     |     10120781 | 1688365      | 5220110      |     2933836 |
| 31   | TAMIL NADU     | 2663520075   | 1177781697  | 958599878   |   3019556343 | 126735743 9  | 122329046 6  | 528523831   |   3163638856 | 137953437 4  | 126198705 2  |   542858173 |
| 32   | TELANGAN A     | NA           | NA          | NA          |   1062611107 | 446439049    | 385742013    | 155269048   |   1129069366 | 474580909    | 438153516    |   190082143 |
| 33   | TRIPURA        | 26807628     | 6066425     | 14394071    |     32436968 | 12183102     | 16329857     | 11331018    |     35068359 | 12506562     | 17999990     |    12502323 |
| 34   | UTTARAKH AND   | 316986284    | 118644322   | 148283961   |    267932127 | 82267803     | 142990521    | 73733187    |    227490838 | 83995912     | 104473943    |    55258401 |
| 35   | UTTAR PRADESH  | 1434589930   | 710567232   | 528269974   |   1742741892 | 862412172    | 639462664    | 351246246   |   1933018113 | 976427787    | 705075736    |   397919530 |
| 36   | WEST BENGAL    | 1014156513   | 330258284   | 492596771   |   1208954488 | 409871631    | 574238847    | 260201559   |   1260495817 | 407734834    | 613166948    |   287220619 |
|      | TOTAL          | 23336888664  | 9705747714  | 887583808 8 |  27514662456 | 117309816 02 | 105479463 48 | 446733405 3 |  29301720831 | 126273435 11 | 113129573 69 |  4929905106 |