The finance ministry is opposing a Reserve Bank of India suggestion to widen the list of sectors eligible for priority sector lending. The Reserve Bank's draft report submitted to the ministry for its comments last week has also recommended that some infrastructure segments should be classified as priority. But a finance ministry official said there is no point in diluting the existing list of priority sectors. “And if banks are too keen then we should also raise the limit from current 40% to 50% or above.” RBI guidelines require banks to lend 40% of their adjusted net credit to the priority sector, which includes agriculture, small-scale industries and other weaker sections. If banks fail to meet the priority sector lending target they can buy loans of regional rural banks or micro-finance institutions.
Source: Punjab News line
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