The categories under priority sector are as follows:
- 1.Agriculture
- Micro, Small and Medium Enterprises
- Export Credit
- Education
- Housing
- Social Infrastructure
- Renewable Energy
- Others MSME
* Branches shall review Customer risk categorization based on the risk categorization generated by the system,
every 6 months
30th Jun and 31st December every year.
Minimum balance:
SB Rs. 1000/ for M/U/SU
SB Rs. 500/- for RURAL
CA Rs. 5000/- M/U
CA Rs. 1000/- (SU/R)
*SMALL CHANGES 3 Based on Investment in P & M OR Equipment Does not exceed T/O DOES NOT EXCEED 1 CRORE MICRO 5 CRORES 10 CRORES SMALL 50 CRORES 50 CRORES MEDIUM 250 CRORES MFG SERVICE (P&M Means Plant and machinery, T/O Means Turnover).
* A service enterprise with investment of Rs 1 Cr in Equipment’s and turnover of Rs 7.50 crs will be classified as
1) Small
2) Micro
3) Mudra
4) Medium
5) Tiny unit PRIORITY
* As per the revised definition of MSMEs as per latest Gazette Notification S.O. 2119 (E) dated June 26, 2020, If the Investment in Plant & Machinery or Equipment does not exceed 50 Cr and turnover does not exceed 250 Cr; the enterprise will be classified as __________
1) Small
2) Micro
3) Mudra
4) Medium
5) Tiny unit
MSME DEFINITION WEF 1.7.20 INVESTMENT P & M OR EQUIPMENT TURNOVER MICRO 1 CR 5 CR SMALL 10 CR 50 CR MEDIUM 50 CR 250 CR MSME:
REVISED DEFINITION 1.7.20
LOGIC: 1, 10, 50 & MULITPLICATION OF 5 FOR TURN OVER
*As per the revised definition of MSMEs as per latest Gazette Notification S.O. 2119 (E) dated June 26, 2020, If the Investment in Plant & Machinery or Equipment does not exceed 1 Cr and turnover does not exceed 5 Cr; the enterprise will be classified as __________
1) Small
2) Micro
3) Mudra
4) Medium
5) Tiny unit
*As per the revised definition of MSMEs as per latest Gazette Notification S.O. 2119 (E) dated June 26, 2020, If the Investment in Plant & Machinery or Equipment does not exceed 50 Cr and turnover does not exceed 250 Cr; the enterprise will be classified as __________
1) Small
2) Micro
3) Mudra
4) Medium
5) Tiny unit
*Under Social Infrastructure, Bank loans up to a limit of ₹………. per borrower for setting up schools, drinking water facilities and sanitation facilities including construction/ refurbishment of household toilets and water improvements at household level, etc
1) 5 MILLION
2) 50 MILLION
3) 500 MILLION
4) 5 BILLION
5) 5 TRILLION
6 9 12 PRIORITY (LOGICS) PRIORITY (LOGICS) 6 zeros- Million 9 zeros-Billion 12 zeros-Trillion
*Under Social Infrastructure, Bank loans up to a limit of ₹………. per borrower for setting up schools, drinking water facilities and sanitation facilities including construction/ refurbishment of household toilets and water improvements at household level, etc
1) 5 MILLION
2) 50 MILLION
3) 500 MILLION
4) 5 BILLION
5) 5 TRILLION
HOW TO ANSWER: if Answer is 5 crores. WRITE: 6/9/12 –mil/bil/tril Now covert 5 crores – (5 + 00,00,000 zeros)- NOW 50 (000,000-MILLION) 50 million is Answer
- WHICH BANKS IT IS APPLICABILE AS PER RBI NOTIFICATION
- DOMESTIC COMMERCIAL BANKS
- FOREIGN BANKS WITH 20 BRANCHES AND ABOVE
- FOREIGN BANKS WITH LESS THAN 20 BRANCHES
- REGIONAL RURAL BANKS (RRB)
- SMAL FINANCE BANKS (SFB)
- PRIMARTY CO OPERATIVE URBAN BANK
- LOCAL AREA BANKS (LAB)
- COMMERCIAL BANKS & FOREIGN BANKS WITH 20 BR & ABOV
- TOTAL PRIORITY TARGET: 40 %of ANBC or CEOBE (higher)
- AGRICULTURE: 18 % ANBC
- MF (1 HEC) SF-(1-2 HEC): 8% ANBC (20-21)
- AFTER THAT GRADUALLY INCREASES
- 9 % ANBC 21-22
- 9.5% ANBC 22-23
- 10 % ANBC 23-24
- NON-CORP(IND) – 13.5 % OF ANBC (90% -12.15% BY MARCH 21)
- MSME (MICRO) – 7.5 % OF ANBC OR CEOBE
- WEAKER SECTION- 10 % OF ANBC OR CEOBE (MARCH 21)
- 11% OF ANBC OR CEOBE (MARCH 22)
- 11.5% OF ANBC OR CEOBE (MARCH 23)
- 12 % OF ANBC OR CEOBE (MARCH 23)
- FOREIGN BANKS WITH LESS THAN 20 BRANCHES
- 40 % of ANBC or CEOBE whichever is higher
- EXPORT: 32 % ANBC
- OTHER THAN EXPORT: 08 %
- COMPLIANCE – Monitored on ‘Quarterly’ Basis
- Priority sector data to be furnished to: FIDD, Central Office, RBI at quarterly and annual intervals
The categories under priority sector are as follows:
- 1.Agriculture
- Micro, Small and Medium Enterprises
- Export Credit
- Education
- Housing
- Social Infrastructure
- Renewable Energy
- Others MSME
MSME: REVISED DEFINITION 1.7.20 Sector definition:
a) MICRO Investment in Plant & Machinery or Equipment does not exceed 1 Crore rupees and T/O does not exceed 5 crores rupees
b) SMALL Investment in Plant and Machinery or Equipment does not exceed 10 crore rupees and T/O does not exceed 50 crore rupees
c) MEDIUM Investment in Plant and Machinery or Equipment does not exceed 50 crore rupees and T/O does not exceed 250 crore rupees
❖ MICRO ENTERPRISES: 7.5 percent of ANBC or CE (OBS Exposure), whichever is higher
❖ Khadi and Village Industries Sector (KVI): All loans to units in the KVI sector will be eligible for classification under the sub-target of 7.5 % prescribed for Micro Enterprises under priority sector.
❖ Loans up to Rs. 50 Crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India, that confirm to the definition of MSME, are eligible to be classified under Priority Sector
❖ EXPORT CREDIT: Export Credit: 2 % of ANBC or CEOBE, whichever is higher, Sanctioned limit of Rs.40 crore per borrower
❖ AGRICULTURE: 18% of ANBC or CEOBE, whichever is higher OUT OF WHICH
(NON CORPRATE 13.5% (ACHIEVE 12.14 % FY 20-21) (ACHIEVE 12.73 % FY 21-22)
Target of 10 % is prescribed for Small FARMER (1 HECTARE) and Marginal farmer (2 HECTARE) To be achieved in a phased manner
financial year Small and Marginal Farmers target 2020-21 8 %
2021-22 9%
2022-23 9.5%
2023-24 10%
❖ AGRICULTURE:
❖ FARM CREDIT
❖ Agriculture Infrastructure
❖ Ancillary activities
❖ FARM CREDIT
❖ Loans to individual farmers [including SHGs or (JLGs), i.e., groups of individual farmers,
❖ Proprietorship firms of farmers,
❖ Directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture.
❖ Loans to farmers against pledge/ hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months
❖ subject to a limit up to Rs. 75 lakh against NWRs/eNWRs & up to Rs 50 lakh against warehouse receipts other than NWRs/eNWRs
❖ Loans to farmers for installation of solar power plants on barren/fallow land or in stilt fashion on agriculture land owned by farmer.
❖ Loans to farmers for installation of stand-alone Solar Agriculture Pumps and for solarisation of grid connected Agriculture Pumps
❖ KCC
❖ Loans to distressed farmers indebted to NON institutional lenders
❖ Loans to SF/MF for purchase of land for Agriculture purpose
❖ FARM CREDIT CONTINUES……………….
❖ Loans to Corporate farmers,
❖ FPO / Companies of individual farmers,
❖ Partnership firms and
❖ Co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of Rs.2 crore per borrower
❖ Loans up to Rs. 5 Crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of their produce at a pre-determined price. Agriculture Infrastructure
❖ Loans for construction of storage facilities (Warehouses, market yards, go downs and silos including cold storage units/ cold storage chains designed to store agriculture produce/products) irrespective of their location.
❖ Soil conservation and watershed development.
❖ Plant tissue culture and Agri-biotechnology,
❖ seed production, production of bio-pesticides, bio-fertilizer, and vermi composting.
❖ aggregate sanctioned limit of Rs.100 crore per borrower from the banking system. Ancillary activities: Loans up to Rs.5 CR to co-operative societies of farmers for disposing of the produce of members. Loans up to Rs. 50 crores to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in agriculture and allied services Loans for setting up of Agri clinics and Agribusiness Centres.
Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs.100 crore per borrower from the banking system.
Bank loans to Primary Agricultural Credit Societies (PACS),
Farmers’ Service Societies (FSS) and
Large-sized Adivasi Multi-Purpose Societies (LAMPS)
for on-lending to agriculture
Loans sanctioned by banks to MFIs/NBFC MFIs for on-lending
Loans sanctioned by banks to NBFCs (other than MFI) for on-lending to ‘Term lending’ component under Agriculture up to Rs.10 lakh per borrower
Outstanding deposits under RIDF and other eligible funds with NABARD SMALL AND MARGINAL FARMERS MARGINAL FARMER:
Farmers with landholding of up to 1 hectare. SMALL FARMER: Farmers with landholding 1 hectare TO 2 hectares SMALL FARMER:
Loans up to Rs. 2 lakhs to individuals solely engaged in Allied Activities without any accompanying land holding criteria Landless agricultural labourers, Tenant farmers, oral lessees and sharecroppers whose share of landholding is within the limits prescribed for SMFs. Loans to SHG or JLG Loans to FPOs/FPC of individual farmers and co-operatives of farmers directly engaged in Agriculture and Allied Activities where the land-holding share of SMFs is not less than 75 %.
❖ LENDING BY BANKS TO NBFCS AND MFIS FOR ON-LENDING: ✓ Agriculture: ‘Term lending’ component under Agriculture will be allowed up to ₹ 10 lakh per borrower.
✓Micro & Small enterprises: On-lending by NBFC will be allowed up to ₹ 20 lakh per borrower.
✓HFC: 20 Lac per borrower. WEAKER SECTION
➢Small and Marginal farmers
➢ Beneficiaries under Govt Sponsored Schemes such as NRLM, (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)
➢SC/ST
➢DIR
➢SHG
➢Persons with disabilities
➢Minority communities as may be notified by Government of India from time to time. TARGET 15 % ➢Distressed persons other than farmers, with loan amount not exceeding ₹1 lakh per borrower to prepay their debt to noninstitutional lenders
➢Individual women beneficiaries up to ₹1 lakh per borrower
➢Artisans, village and cottage industries where individual credit limits do not exceed ₹1 lakh
➢ Distressed farmers indebted to non-institutional lenders
➢WEAKER SECTION: 12 % ANBC or CEOBE Exposure, whichever is higher, to achieved in phased manner financial year WEAKER SECTION target 2020-21 10 % 2021-22 11% 2022-23 11.5% 2023-24 12% EDUCATION
❖ Loans to individuals for educational purposes, including vocational courses, not exceeding Rs. 20 lakhs. Loans currently classified as priority sector will continue till maturity. HOUSING LOAN
❖HOUSING LOAN: (METRPOLITAN: 10 lacs and above population)
❖ METRO: PROJECT COST: 45 Lacs
❖ LOAN: 35 lacs
❖ OTHER THAN METRO- PROJECT COST: 30 lacs
❖ LOAN: 25 lacs
❖ HOUSING REPAIRS:
❖ Loans up to Rs. 10 lakhs in metropolitan centres &
❖ Up to Rs. 6 lakhs in other centres
❖ for repairs to damaged dwelling units conforming to the overall cost of the dwelling unit. Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to dwelling units with carpet area of not more than 60 sq.m (RBI)
❖ Renewable Energy: Bank loans up to a limit of Rs 30 Crore to borrowers for purposes like
❖ Solar based power generators,
❖ Biomass-based power generators
❖ Wind mills,
❖ micro-hydel plants and for nonconventional energy based public utilities, viz., street lighting systems and remote village electrification etc., are eligible for Priority Sector Classification.
❖ For individual households, the loan limit is Rs. 10 Lakh per borrower OTHER LOANS
Loans not exceeding Rs. 1.00 lakh per borrower provided directly by banks to individuals and individual members of SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed Rs. 1.00 lakh and for non-rural areas it does not exceed Rs 1.60 lakh.
Loans not exceeding Rs. 2.00 lakh provided directly by banks to SHG/JLG for activities other than agriculture or MSME, viz., loans for meeting social needs, construction or repair of house, construction of toilets or any viable common activity started by the SHGs
❖ Social Infrastructure: Bank loans of Rs. 5 crore per borrower for setting up schools, drinking water facilities and sanitation facilities including construction/ refurbishment of household toilets and water improvements at household level, etc.
❖ Rs. 10 crore per borrower for building health care facilities including under ‘Ayushman Bharat’ in Tier II to Tier VI centres.
❖ Loans up to Rs. 50 Crore to Start-ups,
❖ PRIORITY SECTOR LOANS UP TO ₹25,000: NO CHARGES
❖ Bank loans to MFIs for on-lending 85 % QUALIFYING ASSETS = INCOME GENERATING ACTICVITY – 50 % Qualifying asset means:
Household annual income in Rural areas does not exceed Rs. 1,25,000/-
while for non-rural areas it should not exceed Rs. 2,00,000/-
Loan does not exceed Rs.75,000/- in the first cycle
and Rs.125,000/- in the subsequent cycles.
Total indebtedness of the borrower does not exceed Rs. 1,25,000/-Education and medical expenses will be excluded while arriving at the total indebtedness of a borrower.
Tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 30,000 with prepayment without penalty.
The loan is without collateral.
Loan is repayable by weekly, fortnightly or monthly installments at the choice of the borrower.
Processing fee not exceeding 1 % the gross loan amount
Margin cap: The margin cap should
Not exceed 10 %for MFIs having loan portfolio exceeding Rs.100 Cr
and 12 % for others. NEW IN PROIORITY: (VALID TILL 2023-24)
To address regional disparities in the flow of priority sector credit at the district level
Districts ranking will be done on the basis of per capita credit flow
Accordingly, from FY 2021-22 onwards, a higher weight
125%- Incremental priority sector credit -Identified districts – where credit flow is comparatively lower (per capita PSL less than ₹6000),
90 % lower weight – identified districts –where credit flow is comparatively higher (per capita PSL greater than ₹25,000) PRIORITY
PSLC CERTIFICATES (NO Transfer of Risk or Loan) :
CBS PORTAL- e-KUBER – Rs 25 lacs and there of
PSLC GENERAL (EXPORT) (COUNTING FOR OVERALL)
PSLC-AGRICULTURE (COUNTING FOR AGCL AND OVERALL)
PSLC – SF/MF (COUNTING FOR SF/MF & OVERALL)
PSLC-MICRO ENTERPRISES (COUNTING FOR MICRO & OVERALL) PRIORITY NON-ACHIEVEMENT
RIDF (RURAL INFRASTRUCTURE DEVELOPMENT FUND) OF NABARD
OTHER FUNDS OF NHB/SIDBI /MUDRA LTD AS DECIDED BY RBI