Priority Sector Lending Norms for Foreign Banks

Press Information Bureau

Government of India

Ministry of Finance

20-December-2012 17:59 IST

As per revised guidelines of Reserve Bank of India (RBI) on Priority Sector Lending, Foreign banks, with 20 and above branches, have been mandated to adhere to the total priority sector lending target of 40 per cent of Adjusted Net Bank Credit (ANBC) or Credit equivalent of Off-balance sheet exposure (CEOBE), whichever is higher, from April 01, 2013. For foreign banks with less than 20 branches, the earlier total priority sector lending target of 32 per cent of ANBC or CEOBE (whichever is higher) has been retained.

RBI has reported that some of the foreign banks with 20 and above branches had raised concerns on the revised targets. A meeting with the foreign banks was convened by RBI in the month of August 2012 to discuss the issues raised by them and in the meeting these banks were impressed upon the need to be part of inclusive growth of the country by drawing upon their global experience to develop innovative solutions and delivery models that would deliver credit in a cost effective manner to agriculture and rural areas. In view of the above, the request of foreign banks has not been favourably considered by BI.

This was stated by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Rajya Sabha today.

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