Priority Sector Landing: The Government of India has also decided to bring wholesale and retail trade under the ambit of the revised guidelines of Micro Small and Medium Enterprises (MSMEs). With this, according to the guidelines of the Reserve Bank of India, wholesale and retail business will also get the benefit of priority sector lending.
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Farmers were involved last year
Last year, the central government had given big relief to small farmers and those who started their business amid the Corona epidemic. RBI had extended the scope of priority sector lending category. After this start-ups were also included in the primary category of bank loans. Under this, loans up to Rs 50 crore are being made available to start-ups. Apart from this, loans are also being made available to farmers for setting up solar plants and compressed biogas plants.
What is Priority Sector Landing?
According to the rules of RBI, banks have to give some part of the loan for development work on priority basis which is called priority sector lending. Banks have been entrusted with the important task of contributing to the development of the country besides ensuring the growth of the financial sector. According to the rules of banking regulator RBI, banks have to give a part of their total loan for development work. This is called priority sector lending.
Who are involved in Priority Sector
The priority sector of the Reserve Bank of India includes many sectors including Agriculture, MSMEs, Education, Housing, Social Infrastructure. Traders believe that this will not create a liquidity crisis in front of startups to run their business. They will have sufficient capital available. Analysts say startups were always considered in the MSME category and had to show profits for three years. By joining the priority sector, they can easily get loans from banks at low rates.
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