Priority Sector Lending By Regional Rural Banks: A Case Study on Uttar Bihar Gramin Bank

Priority sector lending is an initiative by government of India to ensure flow of credit to underdeveloped sectors of the economy. The financial institutions situated within the boundaries of the country are required to comply with the guidelines issued by the Reserve Bank of India regarding Priority Sector Lending. Regional Rural Banks are also required to lend at least 75 percent of their outstanding advance to the notified sectors. This also serves as the indicator of performance for RRBs since their primary objective is to supply credit in rural sectors. The performance of Uttar Bihar Gramin Bank in lending to priority sectors is satisfactory with 95.89 percent of advances being supplied to priority sectors.