JOIN USBanks eye non-agri sectors to meet priority lending cap
Domestic banks are required to deploy at least 40 per cent of their loan book under priority sector lending. To achieve this target, Vijaya Bank has launched a product called ‘Jewel Loans’, where loans are given to farmers against gold ornaments. This has seen a growth 15 per cent since March 2009.
The bank has also targeted the education loan segment, which is part of the priority sector. This segment has seen a growth of 8 per cent in the period between March to July and the bank expects to witness an escalation in demand in the coming months. The third area the bank is targeting in the priority sector is the housing loan segment in the region of Rs 5 to Rs 20 lakh. All banks have witnessed a doubling of figures in this segment between March and July.
Talking to Deccan Herald Vijaya Bank Chairman and Managing Director Albert Tauro said, “Even though most of our branches are in the South, particularly in Karnataka, which has not been affected by drought as badly as other parts of the country, agricultural disbursement has no doubt been hit this year.”
Similarly, to meet the priority sector target, Canara Bank has launched 15 SME ‘sulabhs’, that is, hubs, this year, across the country to give loans exclusively to SMEs, which come under the priority sector. These sulabhs have witnessed loan sanctions of Rs 800 to Rs 900 crore in the past two months, said a top official in the bank, thus helping the bank move towards the requisite target.