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Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors i.e industry, agriculture. these may further be sub divided. Banks are directed by the state bank of the country that loans must be given on reduced interest rates with discounts to promote these fields. Such lending is called priority sector lending
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What is non priority sector lending in banks?
Other than priority sector lending i.e. education,agriculture,housing etc...these all are priorty sector lendings. And like personal loan,credit card all these are count in non priority lending. Diffrence is interest rate is high for non priority lending. Government is too cautious for priority lending because it can boost our indian economy.
What is Priority sector lending?
Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors i.e industry, agriculture. these may further be sub divided. Banks are directed by the state bank of the country that loans must be given on reduced interest rates with discounts to promote these fields. Such lending is called priority sector lending .
What is inter bank lending?
Banks lending money to other banks.
What is inter bank participation certificate?
Inter Bank Participation Certificates (IBPCs) bought by banks, on a risk sharing basis, shall be eligible for classification under respective categories of priority sector, provided the underlying assets are eligible to be categorized under the respective categories of priority sector and the banks fulfill the Reserve Bank guidelines on IBPCs.
Banks are required to pay how much percentage of their net bank credit to Priority Sector is advance?
10% please tell me i m right or wrong
What is non priority sector lending in banks?
Other than priority sector lending i.e. education,agriculture,housing etc...these all are priorty sector lendings. And like personal loan,credit card all these are count in non priority lending. Diffrence is interest rate is high for non priority lending. Government is too cautious for priority lending because it can boost our indian economy.
Inthe changing banking sector environment concept of priority sector lending needs to be scrapped comment?
The first step is to change the attitude of the commercial banks towards priority sector lending and the following steps may be adopted to achieve this objective. 1. The RBI should dispense with the present system of target-oriented lending to the priority sector and banks should be given total freedom to lend to all deserving and productive enterprises according to their own norms of lending without spoon-feeding the banks in this regard. 2. The present system of allocating 40% of lendable resources to the priority sector by every bank should not be insisted upon and all penal provisions for not achieving this level of lending to the priority sector should be withdrawn with a view to give a free hand to the banks to develop a portfolio of their choice in the interest of improving the asset quality of every bank. 3. Instead of a penalty-based system which exists at present to penalise the banks who do not reach the stipulated targets, the RBI should come out with an incentive-based system to encourage lending to the priority sector, as an incentivised system will receive better receptivity at all levels, and this will provide the necessary thrust to priority-sector lending by banks. And the incentives could be broadly on the following lines. a) The incentives proposed could be on a staggered basis and inbuilt incentives can be provided for reaching a level of 20%, 30% and 40% of their lendable resources and incentives can be considered in Branch licensing and linking the percentages to CRR /SLR requirements. b) A certain percentage of profit can be exempted from income-tax for those banks reaching these levels of lending to the priority sector. c) Any other incentive could be thought of to provide impetus for lending to the priority sector. 4. All subsidies now provided to banks for lending to certain priority sectors / Govt. Sponsored Schemes should be withdrawn, and in its place, appropriate incentives should be provided so as to minimise the misuse of the subsidy system.
What is Priority sector lending?
Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors i.e industry, agriculture. these may further be sub divided. Banks are directed by the state bank of the country that loans must be given on reduced interest rates with discounts to promote these fields. Such lending is called priority sector lending .
Is money lending act and provision are effective on private banking sector?
is privet banks comes in money lending act criteria
What are the causes of increase in non performing assets account of commercial bank?
REASONS- 1.current macroeconomic situation in the country. 2.increased interest rates in the past 3.lower economic growth. 4.aggresive lending by the banks in the past. 5. priority sector lending esp.to agriculture and MSMEs.
What is inter bank lending?
Banks lending money to other banks.
What is inter bank participation certificate?
Inter Bank Participation Certificates (IBPCs) bought by banks, on a risk sharing basis, shall be eligible for classification under respective categories of priority sector, provided the underlying assets are eligible to be categorized under the respective categories of priority sector and the banks fulfill the Reserve Bank guidelines on IBPCs.
Banks are required to pay how much percentage of their net bank credit to Priority Sector is advance?
10% please tell me i m right or wrong
What is net bank credit?
It is the Gross Bank Credit (GBC) minus the exempted deposits such as NRNR, FCNR, deposits,etc. This is the base on which the achievement of the priority sector lending rate gets calculated.
What are the two types of banks?
types of commercial banks are: 1) public sector banks 2) private sector banks....
How reserve bank of India regulate public sector bank?
Reserve bank of India not only regulates the public sector banks in India, but also the private banks and international banks that operate inside India. Reserve Bank of India supervises/oversees the banking operations of all banks in India. They are responsible for the proper functioning of all the banks and they are also the lender to the banks (The place where banks go to borrow money if they are short of funds). They also decide the lending and deposit rates for all banks in the country.
What are the two types of commercial bank?
types of commercial banks are: 1) public sector banks 2) private sector banks....
