| Message : |
Quite wide questions; yet some insight:
1. Priority Sector: Loans and advances to Agriculture and allied activities, Small Scale Industries, Small Retail Traders/ Businesses, Professionals & Self Employed Persons, Small Road Transport Operators are basically called Priority Sector. Additionally, Home Loans & Export Credit also falls into it. RBI decides from time to time the sectors/ activities and the ceilings for loans and advances in relation to Priority Sector. You can have more details from RBI's website viz. RBI.org.in for more details and also compliance requirements for indian and foreign banks.
2. Problems faced by Development Finance Institutions/ Remedies:
High cost of funds, lower earnings on lending, large instances of NPA are major problems and many an institution is resolvng it by a) adopting universal banking [e.g. ICICI and IDBI], b)sterghthening recovery efforts by forming ARCs etc.
3.Reasons for NPAs/ Remedies:
Erronious lending due to errors in appraisal and adminstration of loans, political interference, bad integrity of concerned parties, ineffective recover mechanisms including delays in legal revicory are major reasons which can be remedied by bettering a) quality of lending in the first place b)making the legal system in the country robust c) encouraging recoveries internally and via ATCs.
The above are merely some directions towards answers to your questions and you need to refer to some standard texts on banking (e.g. Tannon's Practice & Law of Banking and Taxman's RBI Manual) for more details.
|
