Dear Sir,
Master Circular on Lending to Priority Sector-Modification
Please refer to our Master Circular RPCD.
No. Plan. BC. 21/ 04.09.01/ 2005-06 dated July 18, 2005 issuing guidelines/instructions/directives
to banks on lending to Priority Sector. In terms of paragraph 1.2.2 (i), loans
to State Electricity Boards (SEBs) only for reimbursing the expenditure already
incurred by them for providing low tension connection from step down points
to the individual farmers for energising their wells are classified as indirect
finance to agriculture.
2. As a part of power sector reforms, some of
the States have bifurcated/restructured the Electricity Boards into two corporations,
for generation and distribution of the power. It has, therefore, been decided
that loans to power distribution corporations/companies, emerging out of bifurcation/restructuring
of SEBs, may also be classified as indirect finance to agriculture subject to
the same conditions as stipulated in paragraph 1.2.2 (i) of the Master Circular.
3. You may advise your Controlling Offices/
branches in this regard.
Yours faithfully
(C.S.Murthy)
Chief General Manager-in-charge