To ensure continuous flow of credit to priority sector, there will
be more frequent monitoring of priority sector lending compliance of banks on ‘quarterly’ basis instead of annual basis as of now.
Non-achievement of Priority Sector targets
Scheduled Commercial Banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to the
Rural Infrastructure Development Fund (RIDF) established with NABARD and other Funds with NABARD/NHB/SIDBI, as decided by the Reserve Bank from time to time.
The interest rates on banks’ contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by Reserve Bank of India from time to time.
Common guidelines for priority sector loans
Banks should comply with the following common guidelines for all categories of advances under the priority sector.
1. Rate of interest
The rates of interest on bank loans will be as per directives issued by our Department of Banking Regulation from time to time.
2. Service charges
No loan related and adhoc service charges/inspection charges should be levied on priority sector loans up to Rs. 25,000.
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