About Us

Rural Planning and Credit Department

The Rural Planning and Credit Department formulates policies relating to rural credit and monitors timely and adequate flow of credit to the rural population for agricultural activities and rural employment programmes. It also formulates policies relating to the priority sector which includes agriculture, small-scale industries, tiny and village industries, artisans and retail traders, professional and self-employed persons, state sponsored organisations for Scheduled Castes and Scheduled Tribes and Government Sponsored credit-linked programmes like Swarnjayanti Gram Swarojgar Yojana (SGSY), Prime Minister’s Rojgar Yojana (PMRY) etc. It implements and monitors the Lead Bank Scheme which is aimed at forging a coordinated approach for providing bank credit to achieve overall development of rural areas in the country. The department also oversees implementation of the Banking Ombudsman Scheme and setting up of Local Area Banks (LABs).

Priority Sector lending by Commercial Banks


The targets and sub-targets set under priority sector lending for domestic and foreign banks operating in India are:

Category of advances

Domestic banks

Foreign banks in India

(i) Aggregate advances to priority sector

40 per cent of net bank credit

32 per cent of net bank credit

(ii) Advances to agriculture

18 per cent of net bank credit

No target

(iii) Advances to weaker sections

10 per cent of net bank credit

No target

(iv) Advances to SSI

No target

10 per cent of net bank credit

(vi) Export Finance

Export finance does not form part of priority sector for domestic banks

12 per cent of net bank credit


Broadly, the activities/ purposes financed by banks included in priority sector are:

  1. Agriculture

  2. Small scale industry

  3. Small road and water transport operators

  4. Retail traders and small business operators

  5. Professional and self-employed persons

  6. State-sponsored organisations for Scheduled Caste/Scheduled Tribe,

  7. Educational loans,

  8. Housing (up to Rs 0.5 million in rural/ semiurban areas and Rs 1 million in urban/ metropolitan areas)

  9. Consumption loans for weaker sections,

  10. Self Help Groups/ Non Governmental Organisations,

  11. Software industry (having credit limits up to Rs 10 million from the banking system)

  12. Food and agro based processing sector

  13. Investment in venture capital

Weaker Sections

The categories of borrowers included under ‘weaker sections’ are :

  1. Small and marginal farmers with land holdings of five acres and less, landless labourers, tenant farmers and sharecroppers;

  2. Artisans, village and cottage industries where individual credit requirements do not exceed Rs. 25,000 ;

  3. Beneficiaries of Integrated Rural Development Programme (IRDP), Scheme for Urban Micro Enterprises (SUME) and Scheme for Liberation and Rehabilitation of Scavangers (SLRS);

  4. Scheduled castes and scheduled tribes;

  5. Beneficiaries under the Differential Rate of Interest (DRI) scheme;

  6. Self Help Groups.

Performance of Banks

Domestic Banks


March 1997

March 1998

March 1999*

Public Sector banks

Private Sector banks

Public Sector banks

Private Sector banks

Public Sector banks

Private Sector banks

Percentage of Priority sector advances to NBC







Percentage of Adv. to agriculture to NBC







Percentage of advances to weaker sections to NBC







Foreign Banks


March 1997

March 1998

March 1999*

Percentage of priority sector Advances to net bank credit




Percentage of export credit to Net bank credit (12)

27 24 25

Percentage of SSI advances to Net bank credit (10)




* Data provisional