• For Education, banks can provide loans to individuals for educational purposes including vocational courses uptoRs. 10 lakh for studies in India & Rs. 20 lakh for studies abroad. • Limits under Social infrastructure Bank loans up to a limit of Rs.5 crore per borrower for building social infrastructure for activities namely schools, health care facilities, drinking water facilities & sanitation facilities in Tier II to Tier VI centres. • Monitoring of Priority Sector Lending targets • To ensure continuous flow of credit to priority sector, there will be more frequent monitoring of priority sector lending compliance of banks on ‘quarterly’ basis instead of annual basis as of now. • Non-achievement of Priority Sector targets • Scheduled Commercial Banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to RIDF established with NABARD & other Funds with NABARD/NHB/SIDBI, as decided by the Reserve Bank from time to time. • The interest rates on banks’ contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by Reserve Bank of India from time to time. RBI revises priority sector lending norms for RRBs • Salient features of the guidelines:- • Targets: 75% of total outstanding to the sectors eligible for classification as priority sector lending. • Categories of the Priority Sector: Medium Enterprises, Social Infrastructure & Renewable Energy will form part of the Priority Sector, in addition to the existing categories, with a cap of 15% of total outstanding. • Agriculture: 18% of total outstanding should be advanced to activities mentioned under Agriculture. • Small & Marginal Farmers: A target of 8% of total outstanding has been prescribed for Small & Marginal Farmers within Agriculture. • Micro Enterprises: A target of 7.5 % of total outstanding has been prescribed for Micro Enterprises. • Weaker Sectors: A target of 15 % of total outstanding has been prescribed for Weaker Sections. • Monitoring: Priority Sector Lending will be monitored on a quarterly as well as annual basis. • Note: The revised guidelines will be operational with effect from Jan 2016. Priority Sector Lending Certificates (PSLCs) • These are a mechanism to enable banks to achieve the priority sector lending target & sub-targets by purchase of these instruments in the event of shortfall. This also incentivizes surplus banks as it allows them to sell their excess achievement over targets thereby enhancing lending to the categories under priority sector. • All PSLCs will be valid till March 31st & will expire on April 1st. • There are only four eligible categories of PSLCs i.e. PSLC General, PSLC Small & Marginal Farmer, PSLC Agriculture & PSLC Micro Enterprises. Topic 8: Financial Market| Important Points on Money Market, Capital Market & their Instruments MONEY MARKET It is a market for short-term debt securities, such as commercial paper, repos, negotiable certificates of deposit , & Treasury Bills with a maturity of one year or less.
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