a study on priority sector lending in ppp
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A STUDY ON PRIORITY SECTOR LENDING IN
THE CENTRAL BANK OF INDIA, PACHORA
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OBJECTIVES
To study of priority sector.
To analysis the priority sector lending activity in Central
bank of India, Pachora.
To analysis the progress made by the Central bank ofIndia in various component of the priority sector lending.
To analyze targets achieved by Central bank of India,Pachora
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RESEARCH METHODOLOGY
Research methodology is a process of collecting theinformation and help to find out the solution to the topicselection by the researcher. This Section includes themethodology which includes. it is a systematic way of
presenting information.
Type of Research
Descriptive research: Project contains Descriptive
Research.
Analytical research
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Data Collection:
There are two types of data collection methods used for thepreparation of the project which are as follows.
Primary Data:
Primary sources includes the data collection throughobservation, discussions, and personal interview with the officials ofthe credit department of the Cental Bank of India.
Secondary Data:
Basic method/sources of collecting secondary data as the Banksrules and regulations, procedure of loan sanctioning, Balance Sheet,referring books etc.
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Sample Size
To study the proceeding three years Annualreport of Central Bank of India.
Data Analysis:
It is done by use of calculations balancesheet, last three years balance sheet.
INTERPRETATION OF DATA:
The data carefully analyzed and short listeddata is then interpreted in the form of charts andgraphs for absolute clarity.
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SCOPE OF STUDY
The project gives the theoretical as well as practical
knowledge.
This project is related to the bank loan proposals only.
The scope of the study is limited.
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Limitations
Every study or work, which is carried out, is full of information but there arecertain limitations because of which we are unable to get the information.
The limitations can be The information system is confidential and hence the banks records were
not fully disclosed.
Some of the records regarding the financial aspects were available only atthe Head-Office, so these data were not available for the study.
Study of the project is limited to only one bank.
There was a time constraint of 60 days for the completion of the project.
This project is related to the bank priority sector lending only.
The scope of the study is limited for only one bank loan policy.
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PRIORITY SECTOR LENDING
The government of India through the instrument of reserve
bank of India mandates certain type of lending on the banks
operating in India irrespective of their origin. RBI sets targets
in terms of percentage (of total money lent by the banks) to be
lent to certain sectors, which in RBIs perception would nothave had access to organized lending market or could not
afford to pay the interest at the commercial rate. This type of
lending is called priority sector lending.
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Definition
Some areas or fields depending on its economic
condition or economic importance are prioritized and
are called priority sector i.e. industry, agriculture. Andlending to these sectors refer to priority sector lending
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CATEGORIES OF PRIORITY SECTOR
Agriculture direct Small enterprisesdirect finance
Small enterprisesindirect finance
Education loan Housing loan
h d
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The targets under priority sector
lending
Total Priority Sector advances Domestic banks (both public
sector and private sector
banks)
Total Priority Sector advances 40 percent of NBC
Total agricultural advances 18 percent of NBC
SSI advances No target
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DATA ANALYSIS AND INTERPRETATION
Financing to priority sector by Central Bank of
India .
year Priority sector
Amount (in lakhs)
2010-11 40,941
2011-12 45,207
2011-12 60,754
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2011,
40941
2012,
45207
2013,
60754
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Direct finance to agriculture sector from Central Bank of India.
year Direct in Agriculture
(Rs. lakhs)
2010-11 11,166
2011-12 15,341
2011-12 28,510
0
5,000
10,000
15,000
20,000
25,000
30,000
2011 2012 2013
advances
advances
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Small Enterprises direct finance Financing to Micro manufacturing Enterprises Sector from
Central Bank of India.year Micro manufacturing
Enterprises Sector advance
2010-2011 377
2011-2012 360
2012-2013 269
0
50
100
150
200
250
300
350
400
2011 2012 2013
advances
advances
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Micro manufacturing Enterprises Sector
Small services Enterprises Sector
Micro service Enterprises Sector
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2011
2012 2013
Micro manufacturing Enterprises Sector
Small services Enterprises Sector
Micro service Enterprises Sector
Fi i t h i l t F
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Financing to housing loan sector From
Central Bank of India.year housing loan
(Rs. lakhs)
2010-2011 20,963
2011-2012 21,077
2012-201322,568
20000
20500
21000
21500
22000
22500
23000
2011 2012 2013
house loan
house loan
Fi i t d ti l t
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Financing to education loan sector
From Central Bank of India.year Education loan
(Rs. lakhs)
2010-2011 3,017
2011-2012 3,257
2012-2013 4,575
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2011 2012 2013
education loan
education loan
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Findings
Credit to priority sector increased as on 31 march 2011 to 31 march 2013.
Bank has exceeded the National Goal (18.00%) of Agriculture to ANBC byachieving 20.68% as on Mar13
Share of Micro Enterprises to total Micro & Small Enterprises has beendecreased. Micro services Enterprises Sector increase from other than smallservices enterprise and micro manufacture enterprise.
Micro manufacturing Enterprises Sector and Small services EnterprisesSector has been decreased.
Credit to other section such as housing loan education loan has beenincreased as on march 2011 to 2013.
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Share of Micro Enterprises to total Micro & Small
Enterprises has been decreased. Micro services
Enterprises Sector increase from other than small
services enterprise and micro manufacture enterprise.
Micro manufacturing Enterprises Sector and Small
services Enterprises Sector has been decreased.
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Suggestion:
priority sectors are big source of revenue for banks, sobank should encourage also the unregistered units byproviding more facilities like less paper work.
Bank has to increase their credit limit and also decreasethe installment amount.
The best way to encourage lending to micro small
industries is to improve the ability of existinginstitution to construct profitable and efficient lendingprogrammers.
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The bank must ensure a systematic follow up of the loans
sanctioned in order to reduce non-performing assets. A special
officer should be appointed for the recovery of loans.
Interest rate, possessing fees, tenure, security and margin
money all these are very important an all kinds of loans. So
banks should revise all above keeping in view all other banks.
The process followed by the bank in sanctioning the loan is
unmanageable; hence it is suggested to make the process easier
in sanctioning the credit facilities to the priority sector.
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