Page 181 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes (xi) Bank finance to HUDCO either as a line of credit or by way of investment in special
bonds issued by HUDCO for on lending to artisans, handloom weavers, etc. under
tiny sector may be treated as indirect lending to SSI (Tiny) Sector.
(xii) Loans for setting up Industrial Estates.
(xiii) KVI Sector.
All KVI sector advances, irrespective of their size, location and investment in plant
and machinery and will be eligible for consideration under the sub-target of 60% of
the SSI segment within priority sector.

(xiv) Manufacturing of common salt through any process including manual operation
which satisfy the norms under SSI.
(xv) Unit engaged in ship breaking/dismantling which satisfy SSI norms.

(xvi) Banks loan to bought leaf factories manufacturing tea provided original cost in
P&M does not exceed the prescribed limit.

Did u know? The investment limit of Rs.1 crore for classification as SSI has been enhanced
to Rs.5 crore in respect of certain specified items under hosiery, hand tools, drugs and
pharmaceutical and stationery items by the Government of India.
10. What type of investments made by banks are reckoned under priority sector ?
Ans. Investments made by the banks in special bonds issued by the specified institutions could
be reckoned as part of priority sector advances, subject to the following conditions:
(i) State Financial Corporations (SFCs)/State Industrial Development Corporations (SIDCs)
Subscription to bonds exclusively floated by SFCs & SIDCs for financing SSI units
will be eligible for inclusion under priority sector as indirect finance to SSI.
(ii) Rural Electrification Corporation (REC)
Subscription to special bonds issued by REC exclusively for financing pump-set
energisation programme in rural and semi-urban areas and the System Improvement
Programme under its Special Projects Agriculture (SI-SPA) will be eligible for
inclusion under priority sector lending as indirect finance to agriculture.
(iii) NABARD

Subscription to bonds issued by NABARD with the objective of financing exclusively
agriculture/allied activities and the non-farm sector will be eligible for inclusion
under the priority sector as indirect finance to agriculture/ SSI, as the case may be.
(iv) Small Industries Development Bank of India (SIDBI)
Subscriptions to bonds exclusively floated by SIDBI for financing of SSI units will be
eligible for inclusion under priority sector as indirect finance to SSIs.

(v) The National Small Industries Corporation Ltd. (NSIC)
Subscription to bonds issued by NSIC exclusively for financing of SSI units will be
eligible for inclusion under priority sector as indirect finance to SSIs.
(vi) National Housing Bank (NHB)
Subscription to bonds issued by NHB exclusively for financing of housing,
irrespective of the loan size per dwelling unit, will be eligible for inclusion under
priority sector advances as indirect housing finance.

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