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Priority sector advances:
Trends, issues and strategies
R. K. Uppal
D. A. V. College, Malout (Punjab), India. E-mail:
rkuppal_mlt@yahoo.com.
Tel: +9194635-99700, 01637-261188.
Accepted 19 October, 2009. |
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An enunciation of the need to channelise the flow of credit
to certain sectors of the economy, known as the priority
sectors, in the largest interest of the country, can be
traced to the Reserve Bank’s credit policy for the year 1967
- 1968. The government initiated measures for social control
over banks in 1967 - 1968 with a view to securing a better
adaptation of the banking system to the needs of economic
planning and it is playing a more active role in aiding
sectors like agriculture and small scale industries (SSIs).
The present study is an attempt to study the priority sector
advances by the public, private and foreign bank groups.
This study is based on the parameters like lending to
priority sector by public, private sector and foreign bank
groups, targets achieved by public, private sector and
foreign bank group NPAs (Non-performing assets), while
lending to priority sector. On the basis of these
parameters, the study concludes that public sector banks
have not achieved the target of 40% while private sector
banks have achieved the overall target. No private sector
bank could achieve the 10% target by lending to weaker
section. On the other hand, foreign banks have achieved the
small scale industries’ export credit and overall target.
NPAs of public sector banks have increased because of high
priority sector advances. The paper also throw light on the
problems or issues which arise due to priority sector
advances and also suggest some strategies to sought out
these issues. All the parameters have been analyzed for the
period, 2006 - 2007.
Key
words:
Priority sector advances, targets achieved, issues,
strategies. |
