Short notes on Priority Sector Advances Performance

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The priority sector advances of public sector banks (PSBs) amounted to Rs. 91319 crore as at end March 1998. This formed nearly 42% of net bank credit of all public sector banks. Of the total priority sector advances, credit to agriculture sector amounted to Rs. 34305 crore and credit to SSI sector was Rs. 38109 crore.

The private sector commercial banks are also required to lend to priority sector as in the case of PSBs. Their share of priority sector advances amounted to Rs. 11614 crore in March 1998 forming nearly 41 per cent of Net Bank credit.

Foreign banks operating in India are required to reach only 32 per cent of their net bank credit under this category, which includes export and SSI sectors.

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They lent a total of Rs. 6940 crore for priority sector as at end March 1998. The outstanding advances of all commercial banks for priority sector industries as on March, 1999 exceed Rs. 1,07,000 crore.

From the above tables, we can observe the details of priority sector advances extended by the public and private sector banks in the recent past. The priority sector advances of public sector banks during the five-year period from March 1998 to March 2002 have gone up almost by 80000 crores.

During the same period the priority sector advances of private sector banks and foreign banks nearly doubled. It may also be seen the total priority sector advances of all the commercial banks has gone up almost by 100% from Rs. 109873 crore in March 1998 to Rs. 206129 crore in March 2002.

It can also be observed that a large part of priority sector advances by public sector banks are extended to agriculture sector and small-scale industry. Source: Report on Trend and Progress of Banking in India.

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Priority Sector Advances

Inclusive of advances to setting up industrial estates, funds provided to RRBs by sponsor banks, loan to software industries, food and agro processing sector, self-help group and venture capital.

Inclusive of advances to setting up industrial estates, funds provided to RRBs by sponsor banks, loan to software industries, food and agro-processing sector, self-help group and venture capital.

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