Direct finance to corporate bodies for agriculture and related activities has been hiked from Rs. 20 lakh to Rs. 1 crore, under the priority sector lending category as per the RBI's latest announcement on May 1, 2007.

Home loans upto Rs. 20 lakh, as against Rs. 15 lakh would also come under the priority sector category, and these revised norms would be applicable with immediate effect.

The targets set for priority sector advances will be related to ANBC, or adjusted net bank credit or credit corresponding to off-balance sheet exposure (OBE), whichever is more, at the end of the previous fiscal year, March 31.

NRI deposits, such as the FCNR (B) and NRNR will not be used to settle commitments for priority sector lending. Current investments of banks in non-SLR bonds in the HTM (held to maturity) category will not be taken into account for computing ANBC upto March 31, 2010, though any new investments in non-SLR bonds in the HTM group will be considered to establish targets for priority sector advances.

As per the new norms, the outstandings placed with NABARD and SIDBI for not being able to meet the PSL norms for agriculture and small and medium enterprises will henceforth be categorized as indirect finance under PSL upto March 2010.

New deposits will not be clubbed so, as per the RBI announcement. A slight reprieve in the home loan sector has been given by the RBI, with upto Rs. 20 lakh loans qualifying as a Priority Sector Lending.

In addition, loans for repair of damaged homes upto Rs. 1 lakh in rural and semi-urban locations, and upto Rs. 2 lakh in metros and urban areas would also be disbursed as priority sector advances.

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