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Nair Committee Report on Priority Sector Lending

The Reserve Bank India had constituted the Committee un­der the chairmanship of M. V. Nair on August 25, 2011 pur­suant to the announcement made in the Monetary Policy Statement 2011-12.


The Major Recommendations of the Nair Committee are:
  • The sector ‘agriculture and allied activities’ maybe a com­posite sector within priority sector, by doing away with dis­tinction between direct and indirect agriculture. The targets for agriculture and allied activities may be 18 per cent of Adjusted Net Bank Credit (ANBC) or credit equivalent of off-balance sheet exposure (CEOBE), whichever is higher.
  • A sub target for small and marginal farmers within agricul­ture and allied activities is recommended, equivalent to 9 percent of ANBC or CEOBE, whichever is higher to be achieved in stages by 2015-16.
  • The MSE sector may continue to be under priority sector. Within MSE sector, a sub target for micro enterprises is recommended equivalent to 7 percent of ANBC or CEOE, whichever is higher to be achieved in stages by 2013-14.
  • The priority sector targets for foreign banks may be increased to 40 percent of ANBC or CEOBE, whichever is higher with sub-target of 15 percent for exports and 15 percent for MSE sector, within which 7 percent may be earmarked for micro enterprises.
  • Bank loans to non-bank financial intermediaries for on lending to specified segments may be allowed to be reckoned for classification under priority sector, up to a minimum of 5 percent of ANBC or CEOBE, whichever is higher, subject to certain due diligence and documentation standards.
Nair Committee Report on Priority Sector Lending  Nair Committee Report on Priority Sector Lending Reviewed by Job today on 11:01 Rating: 5

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