Question

As we all know, banks are required to give $40\%$ of their total advance to priority sector areas. Which of the following will be considered a loan to priority sector?
(A) Loan to a student for getting medical education at a college in the United Kingdom.
(B) Loan to a farmer for rebuilding his house which was demolished in a recent flood.
(C) Loan to a private transporter to purchase another fleet of $10$ trucks and $30$ taxis to ply in $4$ metros.

• A. Only (A)
• B. Only (B)
• C. Only (A) and (B)
• D. All (A), (B) and (C)

Answer 1

Answer: (C)

Only (A) and (B)

As we all know, banks are required to give 40% of their total advance to priority sectors. Priority sector lending by RBI is an important role. These sectors are provided with credit facility so that economic growth process fastens. The following will be considered a loan to priority sector:
(A) Loan to a student for getting medical education at a college in the United Kingdom.
(B) Loan to a farmer for rebuilding his house which was demolished in a recent flood.