A Study on Priority Sector Lending by Kerala Gramin Bank with special reference to Agricultural Lending in Malappuram District, Kerala

ICIMP-2018 | SPECIAL ISSUE | SEP-2018 | Published Online: 03 October 2018    PDF ( 279 KB )
Author(s)
Dr. M. Saravanan 1; C. Anees Babu 2

1Associate professor & Head, Post Graduate Department of International business, Sree Narayana Guru College, KG Chavadi, Ciombatore, Tamilnadu (India)

2Research Scholar in commerce , Department of commerce and Management Studies, Sree Narayana Guru College, KG Chavadi, Ciombatore, Tamilnadu (India)

Abstract

The policy on priority sectors lending assumed great significance after the nationalization of major banks. The policy has come to be regarded as one of the most important ones aiming at attaining the socio-economic goals. The principle objective of new schemes was to achieve a wide spread of bank credit avoiding concentration, and directing a large volume of credit flow to the hitherto neglected sectors. In the context of the severe neglect by the banks of the credit requirements of the agricultural sectors the RBI take some thinking to bring agricultural sector in the main stream of the institutional credit. Since the govt. has accepted the planned development of our economy and banks play pivotal role for the development of our economy. They are the primary credit providers and the vehicles for promoting economic development in our country. Initially, priority sector was defined to include agriculture, SSI, and exports and each bank was given a target and the performance of bank in this regard was to be monitored continuously by the RBI. With the purpose of encouraging g banks to increase their priority sectors lending, the RBI took two concrete steps. One was to provide liberal finance facilities to the banks and the other was to introduce credit guarantee scheme as support measure for bank lending to the priority sectors. Now a days the priority sector lending was given due importance. Every bank provides a certain percentage of their total outstanding to priority sector lending. For commercial banks 40% of their total outstanding advances should constitute priority sectors. For RRBs, priority sector advances should constitute 60% of their total outstanding advances It has been the last few decades that the priority sector lending was started by the banks in India, but it is essential to examine the extent of achievement of banks with regard to the priority sector lending. So it is with this background in mind that the present study titled “A study on priority sector lending by Kerala Gram Bank with special reference to Agricultural Lending in Malappuram district, Kerala” has been undertaken.

Keywords
priority sector, agricultural credit, kerala Gramin Bank, direct finance, indirect finance , regional rural bank, DRI
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