What is Priority Sector Advances

Definition: As per the RBI, Priority sector advances ‘constitute lending to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation.’

Description: Priority sector comprises agriculture, micro and small enterprises, education, housing, export credit and advances to weaker sections. Domestic commercial banks and foreign banks with a network of 20 and more branches are required to lend 40% of their total disbursal to the priority sector.

Also, foreign banks with less than 20 branches are required to lend 32% of their total disbursal to the priority sector.


Also See: Subsidy, Index for Industrial Production


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