Lending To Priority Sector In India: A Study Of Public And Private Banks

Abstract

Priority sector lending is undoubtedly one of the most appreciable reforms initiated by Government of India to ensure the betterment of lagging and deprived groups of society. As per the directives of RBI all scheduled commercial banks from public as well as private sector are hereby under compulsion to lend at least 40 per cent of Adjusted Net Bank Credit or credit equivalent amount of Off Balance Sheet Exposures (whichever is higher)to priority sectors. Although all Indian bank, irrespective to their ownership, are supposed to share the responsibility of uplifting needy section equally yet the actual scenario does not portray the same. In this context, the present paper attempts to analyse whether the practice of priority sector lending is similar for public and private sector banks or one of these two sectors is more committed to its task?