Lok Sabha Question No. 164 (UNSTARRED), answered on 2024-07-22
Subject: Reserved Loans
Ministry: FINANCE
Asked by: Shri Satpal Brahamchari

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES LOK SABHA

UNSTARRED QUESTION NO. 164

TO BE ANSWERED ON THE 22 ND  JULY 2024, / Ashadha 31, 1946 (Saka)

## Reserved Loans

## QUESTION 164. SHRI SATPAL BRAHAMCHARI

Will the Minister of Finance be pleased to state:

- (a) the details of providing reserved loans in the country and its current status;
- (b) the details of steps taken by the Government to make the loan reserved for the banking sector as safe as possible;
- (c) whether  the  Government  keeping  in  mind  the  importance  of  reserved  loan  for  the deprived  sections  and  promotion  of  small  businesses  is  considering  to  formulate comprehensive policy in this area; and
- (d) if so, the details thereof?

## ANSWER

## To be answered by MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (d): Reserve Bank of India (RBI) has framed the Priority Sector Lending (PSL) guidelines in order to facilitate the flow of credit to segments which, though credit worthy, may not have access to adequate credit from the banking system. RBI has prescribed an overall target of 40% of  Adjusted  Net  Bank  Credit  (ANBC) or Credit  Equivalent of Off-balance Sheet Exposures (CEOBE). Within the overall target of 40% of ANBC/ CEOBE, whichever is higher, a target of 18% has been prescribed for Agriculture. Sub-target of 10% have been specified for specific segments such as small and marginal farmers and 7.5% for micro enterprises. Further, a target of 12% has been mandated for lending to weaker sections, which inter-alia , include Scheduled Castes (SCs) & Scheduled Tribes (STs), small & marginal farmers, Artisans, beneficiaries of NRLM/NULM, SHGs, Minority communities etc.

## Current Status (as on March 31, 2024) of credit under PSL by Schedules Commercial Banks:

| Sectors                    |   AMT(in crores) |   Target as% of ANBC |   %Achievement |
|----------------------------|------------------|----------------------|----------------|
| Priority Sector Lending    |          6330079 |                 40   |          45.33 |
| Agriculture Advances       |          2636664 |                 18   |          18.88 |
| Small and Marginal Farmers |          1507638 |                 10   |          10.8  |
| Micro Enterprises          |          1273968 |                  7.5 |           9.12 |
| Weaker Sections            |          1888902 |                 12   |          13.53 |

Source: RBI

## Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs)

Additionally, RBI issues a Master Circular dated 16 th April 2024 on Credit Facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs), wherein banks are advised to take measures to step up their advances to SCs/STs.

- Banks should periodically review their lending procedures and policies to see that loans are sanctioned in time, are adequate and production-oriented and that they generate incremental income to make them self-liquidating.
- Banks should not insist on deposits while considering loan applications under Government sponsored poverty alleviation schemes/self-employment programmes from borrowers belonging to SCs/STs.
- Rejection of SC/STs' loan applications under government programmes should be done at the next higher level instead of at the branch level and reasons of rejection should be clearly indicated.
- A special cell should be set up at the Head Office of banks for monitoring the flow of credit to SC/ST beneficiaries.

## Credit Facilities to Minority Communities

RBI  issues  a  Master  Circular  dated  1 st April  2023  on  Credit  Facilities  to  Minority Communities to ensure that minority communities secure, in a fair and adequate measure, the benefits flowing from various Government sponsored schemes. Further banks are also advised to ensure smooth flow of bank credit to minority communities.

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