September 15, 2004
The Chairman/ Managing Director/ Chief Executive
Officer
(All scheduled commercial banks)
Dear Sir,
Priority Sector Lending – Classification of advances
It has come to our notice that some banks have
been classifying the advances to food and agro-based processing sector units,
whose investment in plant & machinery is above Rs. 5 crore, as also housing
loans exceeding Rs. 10 lakh, under priority sector. Such a classification is
not in conformity with the guidelines contained in the Master
Circular dated July 20, 2004 on Lending to Priority Sector.
2. Banks are, therefore, advised to classify
the advances made by them to various sectors within the priority sector strictly
as per the guidelines contained in the Master
Circular on Lending to Priority Sector.
3. We shall be glad if you please issue necessary
instructions to your controlling offices/branches for appropriate action.
4. Please acknowledge receipt.
Yours faithfully,
(C. S. Murthy)
Chief General Manager-in-Charge