All scheduled commercial banks must follow priority sector advances guidelines, including Advances to Services and Advances to Personal Loan guidelines.
Advances to Services as Priority Sector Advances
Guidelines for advances to the service as priority sector advances have been classified as under,
Education Loan
Education loan under priority sector advance includes Advances to individuals for educational purposes, including vocational courses maximum up to Rs.10.00 lacs irrespective of the sanctioned amount.
Housing Loan
Under priority sector advance, a housing loan includes a loan to an individual’s maximum of up to Rs.28.00 lacs in metropolitan centers (with a population of ten lacs and above) for the purchase or construction of a dwelling unit per family, provided the overall cost of the dwelling unit should not exceed Rs.35.00 lacs and Loan to individual’s maximum up to Rs.20.00 lacs in other centers for purchased or construction of a dwelling unit per family provided the overall cost of the dwelling unit should not exceed Rs.25.00 lacs. The bank staff housing loans are excluded. Housing loans backed by long-term bonds are exempted from Adjusted Net Bank Credit (ANBC).
Under priority sector advance, housing loan includes loans to individual, maximum up to Rs.5.00 lacs in metropolitan centers and maximum up to Rs.2.00 lacs in other centers for repairs to damaged dwelling units.
Housing loan under priority sector advance includes bank loans to any governmental agency to construct dwelling units or slum clearance and rehabilitation of slum dwellers with a maximum ceiling of Rs.10.00 lacs per dwelling unit.
Under priority sector advance, housing loan includes loans sanctioned by banks for housing projects, especially for constructing houses for economically weaker sections of peoples and low-income groups, with the maximum total cost of Rs.10.00 lacs per dwelling unit. The family whose yearly income is less than Rs.2.00 lacs have come under the economically weaker sections and low-income groups, irrespective of the location.
Housing loan under priority sector advance includes bank loans to Housing Finance Companies (HFCs), approved by the National Housing Board (NHB) for their refinance, for lending with the purpose of purchase or construction or reconstruction of individual dwelling units or slum clearance and rehabilitation of slum dwellers, subject to a total loan of Rs.10.00 lacs per borrower.
Loans to Housing Finance Companies (HFCs) are restricted to 5% of the individual bank’s total priority sector lending as per the eligibility criteria of priority sector loans.
Under priority sector advance, housing loan includes outstanding deposits with the National Housing Board (NHB) on account of priority sector shortfall.
Social Infrastructure Loan
Social Infrastructure loan under priority sector advance includes the bank loans maximum up to a limit of Rs.500.00 lacs per borrower to build social infrastructure for activities, namely health care facilities, schools, sanitation facilities, and drinking water facilities, including construction or refurbishment of household toilets and household level water improvements in Tier 2 to Tier 6 centers.
Social Infrastructure loan under priority sector advance includes the bank credit to Micro Finance Institutions (MFIs) extended for lending to individuals and also to members of Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) for water and sanitation facilities.
Renewable Energy Loan
Renewable Energy loan under priority sector advance includes the bank loans maximum up to a limit of Rs.15.00 crores to borrowers for biomass-based power generators, solar-based power generators, windmills, micro-hydro plants, and non-conventional energy for public utilities like remote electrification and street lighting systems. Furthermore, the loan limit will be Rs.10.00 lacs per borrower in the case of individual households.
Personal loans under priority sector advance include loans not more than Rs.50,000/- per borrower provided directly by banks to individuals and their Self-Help Groups (SHGs) or Joint Liability Groups (JLGs), with the individual borrower’s maximum household annual income being Rs.1,00,000/- in case of a rural area and Rs.1,60,000/- in case of the non-rural regions.
Advances to Personal Loan as Priority Sector Advances
Guideline for personal Loan which covered under priority sector advances as mentioned below,
Personal Loan under priority sector advance includes loans to distressed persons (other than farmers) not more than Rs.1,00,000/- per borrower to prepay their debt to non-organized sector lenders.
Personal loans under priority sector advance are sanctioned to state-sponsored organizations for Scheduled Castes or Scheduled Tribes for the pre-defined purpose of purchase and supply of inputs and/or the marketing of the outputs of these organizations’ beneficiaries.