Bank Lending to the Priority Sector grew at 10% in October 2011 on an Annual Basis

Bank lending to the priority sector grew at a mere 10 % in October 2011 on an annual basis due to lower offtake by agriculture and MSME segments as well as decline in micro credit. Credit offtake by the priority sector had grown by 19.9 per cent during October 2010.

Credit disbursement to the priority sector stood at Rs 12.48 lakh crore in October 2011 compared to Rs 11.35 lakh crore in October 2010.

Bank disbursements to agriculture and allied activities in October 2011went up by a mere 7.1 per cent to Rs 4.35 lakh crore. In October 2010, credit disbursement to the segment had gone up by 20.4 per cent on an annual basis.

growth in offtake by the micro and small enterprises (MSME) slowed to 17.4 per cent at Rs 4.73 lakh crore in October 2011. Bank credit disbursement to the sector had increased by 20 per cent in October 2010.

The micro sector witnessed a decline of 13.3 per in October 2011 to Rs 24601 crore. Micro credit had grown by over 50 per cent in the same month in 2010.

Credit to the housing sector in October 2011 stood at Rs 2.36 lakh crore, up a meagre 3.5 per cent on an annual basis. The growth in credit to housing had stood at 9.3 per cent in October 2010. Bank credit disbursement to weaker sections grew by 13.3 per cent to Rs 2.20 lakh crore during the month under review.

Credit offtake by weaker sections from banks had risen at an annual rate of 27.7 per cent in October 2010.
While some priority sectors like agriculture and loans for weaker sections is disbursed at an interest rate lower than their prime lending rates, other segments do not fall under the subsidised lending regime.