Priority Sector Lending – Investment in special bonds
With a view to rationalising the banks' investments under priority sector lending and encouraging banks to increasingly lend directly to the farmers/other priority sector borrowers, RBI has decided that The investments that may be made by banks on or after April 1, 2005 in the bonds issued by the specified institutions (except NABARD), i.e. REC, SFCs/SIDCs, SIDBI, NSIC, NHB and HUDCO shall not be eligible for classification under priority sector lending.
The investments, which have already been made/to be made by banks up to March 31, 2005, in the special bonds issued by the above specified institutions (except NABARD), shall not be eligible for classification under priority sector lending with effect from April 1, 2006.
The investments in the special bonds issued by NABARD shall not be eligible for classification under priority sector lending with effect from April 1, 2007.
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