NOTE: SBINEWS DOES NOT PERMIT CIRCULATION OF ATTACHMENTS. ATTACHMENTS, IF ANY, CIRCULATED WILL BE ONLY BECAUSE OF VIRUSES. PLEASE,THEREFORE, IGNORE ATTACHMENTS IF ANY IN SBINEWS MESSAGES ************************************************************************ SBI plans Rs 11000 cr priority lending (Business Standard) K Ram Kumar / Mumbai June 16,2004 State Bank of India (SBI) is betting big on priority sector lending. It plans to lend Rs 11,000 crore under this head for the current financial year compared with Rs 7,700 crore disbursed in the previous financial year. SBI is gung-ho about lending to the priority sector as interest rate charged of customers ranges between 8.5-11.5 per cent. With big corporates making do without the assistance of banks, the latter are reeling under surplus liquidity. Deploying the excess liquidity in the call money market fetches only 4.25 per cent and parking funds at the repo window of the Reserve Bank of India earns 4.50 per cent. Faced with barely positive returns, banks, including SBI, find lending to the priority sector quite an attractive proposition. Priority sector lending currently accounts for 39 per cent of the banking behemoth?s net bank credit of Rs 1,32,000 crore. If the Rs 11,000 crore lending target is achieved, then disbursements by SBI under this category will cross the Rs 60,000 crore mark in FY05. Lending to agriculture, small scale industry, small business, transport operators, village and cottage industries, rural artisans and other weaker sections, education, housing etc constitutes priority sector lending. The target for priority sector lending for banks is pegged at 40 per cent of their net bank credit. Within priority sector, SBI wants to ramp up its lending to agriculture by a whopping 133 per cent to Rs 2,800 crore compared with Rs 1,200 crore disbursed in the previous year. This is in tune the Centre?s resolve to give a leg up to the agriculture sector. The target for lending to the small scale industries, pegged at Rs 1,500 crore, is a massive 131 per cent jump over the previous year?s disbursement of Rs 650 crore. Under the head of small businesses, the advances target is set at Rs 1,120 crore compared with Rs 800 crore in the year-ago period. The bank expects to lend Rs 6,000 crore to the housing sector this year compared with Rs 4,800 crore in the previous year. A good chunk of this lending (advances up to Rs 10 lakh) qualifies for treatment as priority sector lending. That lending to the sector can be attractive has been vouchsafed by A S Ganguly, chairman of RBI?s working group of flow of credit to the SSI sector. He said that the slowing down of credit offtake by large corporates due to opening up of new sources for accessing finance and stagnation of credit demand by retail business, makes financing the priority sector an opportunity to expand banks? business profitably. ===== From: R.S.Pai Web Address: http://rspai.tripod.com __________________________________ Do you Yahoo!? Yahoo! Mail - You care about security. So do we. http://promotions.yahoo.com/new_mail *************************************************************************** Mailing list (sbinews@xxxxxxxxxxxxx) related information: News/articles about SBI and Banking related matters published in the print media, Internet etc will be circulated through this Mailing List. The messages in this list will help in improving awareness of SBI and its activities vis-a-vis the happenings in the Banking industry. This should be of help to all staff members of SBI, particularly those who are preparing for promotional written tests/interviews/group discussions. Subscription to this Mailing List is simple and FREE. Please check the procedure below. Please share this information with other colleagues/branches that could be interested in subscribing to this Mailing List. The messages circulated here should not be deemed to have the official endorsement of the SBI or any of its employees. The correct factual position may be ascertained from official sources. To join this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx with the word 'subscribe' without the quotes in the subject of the email message. To leave this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx with the word 'unsubscribe' without the quotes in the subject of the email message. Archives (old messages) are available for viewing at: //www.freelists.org/archives/sbinews Click on the month-year at the lower left corner to view messages posted during that month. This is an announcements/newsletter type mailing list i.e. only the Moderator/s can post messages to the list. This mailing list is maintained and moderated by Sri. R.S.Pai, currently working as Chief Manager(IT-Internet Banking), SBI, Corporate Centre, Mumbai. Visit http://rspai.tripod.com for some useful Banking, Reference and Utilities Links