Page 188 - DMGT303_BANKING_AND_INSURANCE

Unit 9: Priority Sector Lending

9.6 Bills Rediscounting Notes

Funds provided by commercial banks to SIDBI by way of rediscounting of bills which are
originally discounted by a commercial bank and rediscounted by SIDBI will be eligible
for inclusion under the priority sector as indirect finance to SSI.
Funds provided by commercial banks to State Financial Corporations (SFCs) by way of
rediscounting of bills of SSIs earlier discounted by the SFCs will be eligible for inclusion
under the priority sector as indirect finance to SSIs.

Sub-targets for all scheduled commercial banks excluding foreign banks

Small Scale Industries

In order to ensure that credit is available to all segments of the SSI sector, banks should ensure
that:
(a) 40 per cent of the total credit to small scale industry goes to the cottage industries, khadi
& village industries, artisans and tiny industries with investment in plant and machinery
up to Rs. 5 lakh;
(b) 20 per cent of the total credit to small scale industry goes to SSI units with investment in
plant and machinery between Rs. 5 lakh and Rs. 25 lakh; and
(c) the remaining 40 percent goes to other SSI units with investment exceeding Rs. 25 lakh.

Processing of Applications

Completion of Application Forms: In areas covered by special schemes such as SGSY, the
concerned project authorities like DRDAs, DICs etc. should arrange for completion of application
forms received from borrowers. In other areas, the bank staff should help the borrowers for this
purpose.
Issue of Acknowledgement of Loan Applications: Banks should give acknowledgement for loan
applications received from weaker sections. Towards this purpose, while getting fresh stocks of
application forms printed, it may be ensured that these forms have perforated portion for
acknowledgement to be completed and issued by the receiving branch. Each branch may affix
on the main application form as well as the corresponding portion for acknowledgement, a
running serial number. While using the existing stock of application forms till then, an
acknowledgement (separately prepared) should be given for each application, care being taken
to ensure that the serial number given on the acknowledgement is also recorded on the main
application.
Disposal of Applications: All loan applications up to a credit limit of Rs. 25,000 should be
disposed of within a fortnight and those for over Rs. 25,000 up to Rs. 5 lakh, within 8 to 9 weeks
provided the loan applications are complete in all respects and accompanied by a 'check list'.
Rejection of Proposals: Branch Managers may reject applications (except in respect of SC/ST)
provided the cases of rejection are verified subsequently by the Divisional/Regional Managers.
In the case of proposals from SC/ST, rejection should be at a level higher than that of Branch
Manager.
Register of Rejected Applications: A register should be maintained at branch wherein the date of
receipt, sanction/rejection/disbursement with reasons therefore etc., should be recorded. The
register should be made available to all inspecting agencies.

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