RBI/2007-2008/326
RPCD.
CO. RRB. No. BC. 71 /03.05.33/2007-08
May 22, 2008
The
Chairman
All Regional Rural Banks
Dear Sir
Increasing
opportunities for flow of credit to priority sector
Please
refer to paragraph 137 of the Annual Policy Statement for the
year 2008-09 (copy enclosed). As indicated in the annual Policy Statement, it
has been decided to allow RRBs to sell loan assets held by them under priority
sector categories in excess of the prescribed priority sector lending target of
60 per cent.
2. Please acknowledge receipt to our respective
Regional Office.
Yours faithfully
(G.Srinivasan)
Chief
General Manager-in-Charge
137. In
terms of the revised guidelines on lending to the priority sector, scheduled commercial
bank can undertake outright purchase of any loan asset eligible to be categorised
under the priority sector from other banks and financial institutions and classify
the same under the respective categories of priority sector lending (direct or
indirect), provided the loans purchased are held at least for a period of six
months. To enable greater flow of credit to the priority sectors, it is proposed:
to allow RRBs to sell loan assets held by them under priority sector categories
in excess of the prescribed priority sector lending target of 60 per cent.