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Classification under PSL or, Priority Sector Lending
Classification under PSL or, Priority Sector Lending
Tags: Gig Economy Economy WTO WTO Public Stockholding MSP Economic Growth Masala Bond Environmental Performance Index Forecast of Economic Growth Functions of the Finance Commission
The goal of "Priority Sector Lending" is to direct banks' lending toward a select group of specific economic sectors and activities. The activities that have been given priority for development and are of national importance are referred to as "priority sectors." Among these are primarily small businesses, agriculture, and others. Further evidence suggests that these industries and activities were not prioritized for bank credit, so they are prioritized for credit provision in order to make them more accessible. In these Headings, except if the setting in any case requires, the terms in this will bear the implications appointed to them underneath:
(i) A Primary Co-operative Bank as defined by Section 5(ccv) of the Banking Regulation Act, 1949, in conjunction with Section 56 of the Act is referred to as an "Urban Co-operative Bank" or "UCB."
(ii) "On-Loaning" signifies advances endorsed by banks to qualified delegates for ahead Loaning for the production of need Area resources. The eligible intermediaries' creation of priority sector assets ought to coincide with the bank loan's maturity on average.
(iii) Priority Sector achievement does not include contingent liabilities or items on the balance sheet. However, if the CEOBE (both priority sector and non-priority sector excluding interbank exposure) is added to the Adjusted Net Bank Credit (ANBC) in the denominator for the computation of PSL targets, foreign banks with fewer than 20 branches can use the Credit Equivalent of Off-Balance Sheet Exposures (CEOBE) extended to borrowers for eligible priority sector activities to achieve the priority sector target.
(iv) When calculating CEOBE for the priority Sector targets, off-balance sheet interbank exposures are not taken into consideration.
(v) "All-inclusive interest" encompasses service fees, processing fees, and interest (effective annual interest).