Region-Wise Priority Sector Lendings by Commercial Banks in India

ABSTRACT

Priority Sector Lending (PSL) is now considered to be a vital component of national agenda after the nationalization of banks and is lending too those sectors of the economy which may not otherwise receive timely and adequate credit. This role is assigned by the Reserve Bank of India (RBI) to the commercial banks for providing a specified portion of the bank lending to few specific sectors like agriculture allied and other activities, Micro- and Small Medium Enterprises (MSME’s), education and housing etc., According to priority sector standards, scheduled commercial banks have to disburse 40% of their loans to the identified priority sectors by the RBI directions. The present paper mainly focuses and analyses the selected region-wise distribution of Priority Sector Lending (PSL) by the Commercial Banks which include both public and private banks. This is essentially meant for an all-round development of the economy as opposed to focusing only on the financial sector. The study shows that there is a significant relationship between the selected regions and the amount of priority sector lending.

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