Banking Term: Priority Sector Lending

Priority Sector Lending is a crucial role given by Reserve Bank of India to the banks to offer specific portions of lending to Priority Sectors.

Priority Sector Lending are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

Priority Sectors are those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation.

Priority Sectors

• Agriculture
• Micro and Small Enterprises
• Education
• Housing
• Export Credit
• Others

Question

Which one of these is not a direct lending under Priority Sector Advances?

1. Loans to Small and Marginal Farmers for purchase of land
2. Agriculture Produce Loans upto Rs.1Olacs per borrower
3. Loans to distressed farmers indebted to non-institutional lenders
4. Finance for setting up Agri-Clinics and Agri-business units
5. None of these

Ans.  C