a study on priority sector lending in ppp

7/27/2019 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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a study on priority sector lending in ppp

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