[Type the document subtitle]

Priority Sector Lending by Domestic Banks in LPG Market Environment

Balaji P Nadar 3rd Semester, ILI New Delhi.

Contents

I. II. III. IV. V. VI. VII. VIII. IX.

X.

Introduction Financial Sector Reform and Priority Sector Lending Narasimham Committee Recommendations (1991) Decline in the PSL and Additional Measures by RBI Narasimham Committee Recommendations (1998) PSL and Credit Flow at present Increase in Priority Sector NPAs Less Profit & ROI Commercial Essentials vs Social Responsibility Conclusion

Introduction: Bankers in India have always been regarded as very important members of the community in government, as well as in social circles.1 Economic progress of a nation can be achieved by availing sufficient, necessary and easy credit facilities to the needy sections of the society. One of the most important government policy since the bank nationalization has been to extend and expand the credit not only to those sectors which were of crucial importance in terms of their contribution to national income and employment but also to those sectors which had been severely neglected in terms of access to the institutional credit.2 Government's accepted policy envisages that the benefit of development must accrue more and more to the relatively less privileged classes of society and that there should be a progressive reduction in the concentration of income, wealth and economic power. These preferred section of society, which was neglected and forms the majority in strengthening the economy of a nation, were granted a superior status in the allotment of loans and advances at low real interest rates by the banks. In the year 1968 after receiving a number of complaints regarding the deployment of bank advances only to large and medium scale industries, the government has amended the Banking Regulation Act, 1949, with the objective of extending social control on banking companies and nationalising 14 banks to make banking more beneficial to the common man. The scheme of social control over banks was introduced for the strong regulation of banking activities through appropriate policy measures and legislation. During the pre-nationalisation period, the total credit to the priority sectors was even lesser than 15 percentage of the net bank credit. Hence the Reserve Bank of India (RBI), after a great discussion, laid down targets for bank lending to those sectors which were given less importance.3 In the beginning stage sectors like agriculture, small scale industries and exports were termed as priority sectors. The policy of social control and the nationalization of major banks in the year 1969 promoted the Priority Sector Lending (PSL) by the banks. A more comprehensive definition of different components of priority sector was adopted by the RBI in
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M L Tannan, Tannans Banking Law and Practice in India 15 (Wadhwa and Company, Nagpur, 21st edn., 2005). K M Shajahan, Priority Sector Bank Lending: Some Important Issues, 33 Economic and Political Weekly 2749 (1998). 3 It becomes mandatory for the banks to allocate 40% of their net credit to priority sectors from 1969.

the year 1972, after proposals from many economists, to include small business, professionals, transport operators, self-employed and educational loans. The concept of weaker section of the society was also incorporated on the recommendations made by a working group on PSL headed by K S Krishnaswamy. The ratio of advances to the priority sector has increased from 15 percent to 33.3 percent in 1974 and further to 40 percent in 1980. The commercial banks have achieved the target and even surpassed it in quantitative terms.4 Because of the active monitoring and the outstanding contributions of the banks after nationalisation, Indian banking system has become an effective channel for the allocating the credit to priority sectors, backward areas and weaker sections.5 Further there were many changes in the scope of priority sector lending and the norms to be reached by the banks. In the year 1989, the share of the priority sector lending has reached 42.2 percent of the total bank advances. Over three decades, priority sector lending has become a tool to bring economic development among the neglected sectors of the society. The reversal in the position of the priority sector in the bank credit started with the banking sector reforms undertaken under the pressure of IMF and World Bank.6 This study will analyse the condition of bank advances to priority sectors after the financial sector reforms and the present status with the contemporary issues attached with it. Financial Sector Reform and Priority Sector Lending: With the new economic reform in the year 1991, popularly known as Liberalisation, Privatisation and Globalisation (LPG) model, the economic boundaries were unclosed for the banking sectors to setup their business in a multitude of jurisdiction. LPG Model has followed the IMF-World Bank prescription of stabilisation and structural adjustment.7 Globalisation introduced cross border investment and cross border banking, which in turn has enabled a banking company to extend its boundary at less governmental intervention and without any territorial barrier. By adapting the LPG model of economic development, India has emerged as
Jaynal Ud-din Ahmed, Priority Sector Lending By Commercial Banks in India: A Case of Barak Valley, 2(1) Asian Journal of Finance and Accounting 92 (2010). and also available at: http://macrothink.org/journal/index.php/ajfa/article/download/75/384 (Visited on October 21, 2011). 5 Uma S, Problems and Prospects of Priority Sector Lending by Commercial Banks, available at: http://www.isec.ac.in/Theses%20new/problems_and_prospects_if_priority_sector_lending_by_commercial_Banks.p df (Visited on October 25, 2011). This is a research thesis submitted by a doctoral candidate. 6 Supra note 2 at 2751. 7 Manish Jain and Amita Verma, Liberalisation, Privatisation and Globalisation Model, 2(6) International Research Journal 758. also available at: http://www.ssmrae.com/admin/images/4444ead379edeac18d62438123a155bd.pdf (Visited on November 2, 2011).
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one of the major economy of the world. The economic development after liberlisation, has also lead to many problems and one of them is on banking sector. The following section will examine the impact of financial reforms on priority sector lending. Narasimham Committee Recommendations (1991): Besides the high level of statutory prerogative, the priority sector advances were identified as one of the major reasons for below average profitability of Indian banks.8 In the year 1991, the committee on financial system was appointed under the chairmanship of M.Narasimham to study the problems in Indian financial system and to suggest some recommendations to refine and reform the structure and efficiency of banking system in the liberalized economy. The committee has recommended a number of changes in the field of priority sector lending in order to avoid the erosion of banks interest. Some of the recommendations of the committee were to redefine the priority sector and to reduce the target for priority sector lending. The following are some important recommendations of the committee9: i) the priority sector should be redefined and it should constitute of marginal farmers, tiny sectors of industry, small business and transport operators, village and cottage industries and other weaker sections. ii) there should be a target fixed at minimum 10 percent of the aggregate bank credit for priority sector advances. iii) priority sector lending should be review at every three years.

This recommendation has not been fully implemented by the RBI and the target of 40 percent of net bank credit for domestic banks was remained untouched, but monitoring the fulfillment of target was not seriously taken.10 At the same time, the effective burden of priority sector advances has been reduced by widening the coverage to include short term advances to all
Christian Roland, Banking Sector Liberalization in India, available at: http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN024227.pdf (Visited on November 6, 2011). 9 Supra note 6 and see also http://www.gktoday.in/bank-po/first-narasimham-committee/ (Visited on November 2, 2011). 10 Rajaram Dasgupta, Priority Sector Lending: Yesterday, Today and Tomorrow, 37 Economic and Political Weekly 4239 (2002).
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traditional plantations under direct agricultural advances, inputs for agricultural and allied sectors under indirect agricultural advances, and even the information technology companies.11 The basic approach followed by the RBI regarding the PSL during the post liberalization period was to broaden the scope of PSL by banks to add totally new areas under the umbrella of priority sector and thereby encourage the diversion from direct PSL.12 Decline in the PSL and Additional Measures by RBI: As a result of the banking sector liberalisation, the number of banks increased and the Indian banking sector has emerged as a strongest one of the world economy. But regarding PSL, even after widening the scope by the RBI of the priority sector, there was a slight decline in the percentage of PSL to the total bank credit. The domestic banks13 were not able to reach the target during 1991-96, as a result of liberalisation, competition and poor monitoring over banks. The percentage of PSL to the net bank credit declined from 40.9 percent in 1991 to 36.4 percent in 1993 and 37.8 percent in 1996. It was not only the case with PSL, but also the credit-deposit ratio of banks declined from 65.2 percent in 1991 to 58.2 percent in 1996.14 During 1995-1996, banks were required to contribute an amount equivalent to any short fall in their priority sector target to the Rural Infrastructural Development Fund (RIDF) which was setup within National Bank for Agricultural and Rural Development (NABARD) to start its operation with an initial corpus of ` 2000 crore.15 This system of depositing the shortage amount of PSL target is viewed as a penalty for the banks which failed to reach the norm. RIDF was set up with an objective to examine that enough funds are available to the state governments and state owned corporations to enable them to complete various types of rural infrastructure projects.16

see Supra note 2 and Supra note 8 at 5. K M Shajahan, Priority Sector Lending: How Useful?, 34 Economic and Political Weekly 3572(1999). 13 Domestic bank includes both public sector banks and private banks. In the year 1993, foreign banks were also advised to increase their target from 7 to 32 percent of their net credit to the priority sectors which includes Small Scale Industries and Export Credit. After LPG, export credit is not a part of the priority sector for domestic banks. 14 Supra note 2 at 2753. 15 Ibid and see Priority Sector Lending, available at: http://dspace.vidyanidhi.org.in:8080/dspace/bitstream/2009/3045/3/UOM-2001-1757-2.pdf (Visited on November 2, 2011). 16 Supra note 12.
12

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In the year 1996, RBI asked the banks to invest in special bond issued by specialized institutions17 and treat those investments as priority sector advances. These changes were obviously meant to enable the banks to move away from the responsibility of lending directly to the priority sectors of the economy.18 During the same period, new private sector banks were also advised by the RBI to observe priority sector lending targets. Even the local area banks in the private sector were advised in August 1996 to observe priority sector lending targets at 40 percent as like the domestic commercial banks. Primary co-operative (urban) banks are also added to the list with an extended target of 60 percent of their total advances.19 The process of directed credit to priority sector intended to achieve equitable economic development with the help of banking. Narasimham Committee Recommendations (1998): Narasimham committee has submitted its second report in the year 1998 with an observation that the PSL by directed credit had led to the increase in Non-Performing Assets (NPAs). It has recommended changes in the scope of the PSL to include employment oriented sectors and for the removal of concessional rates of interest on loans up to ` 2 lakh. For the second time the committee has recommended to phase out the overall targets and sub targets for priority sectors. Debt securitization within the priority sector was also suggested to enable the banks, which are not able to reach the target, to purchase the debt from other institutions. It was further observed by the committee that social banking need not conflict with canons of sound banking, but when banks are required by directive to meet specific quantitative targets, there is a danger of erosion of the quality of loan portfolio.20 Unlike the first report of the committee, many recommendations of the committees second report were accepted by the RBI. In the year 1999, RBI has enlarged the coverage of PSL to food processing, related activities in agriculture, fisheries, poultry and dairying, as recommended by the committee. The rate of interests on loans up to ` 2 lakh was also fixed that should not exceed the prime lending rate of the bank.
States specialized institutions like State Financial Corporations, State Industrial Development Corporations, NABARD and the National Housing Bank. 18 C.P. Chandrasekhar and Parthapratim Pal, Financial Liberalization in India: An Assessment of its Nature and Outcomes, available at: http://www.networkideas.org/featart/may2006/Financial_Liberalization.pdf (Visited on November 11, 2011). 19 The Draft Technical Paper on Review of Priority Sector Lending (September 2005) by the Internal Working Group set up in Reserve Bank under the chairmanship of C. S. Murthy. 20 Supra note 14.
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It was recommended by a technical group that the PSL targets could be linked to the previous years net bank credit and upscaled by the estimated growth in credit during the year.21 In the year 2008, a report of the committee on financial sector reforms has suggested the introduction of priority sector lending certificates which can provide market driven interest subsidy to the banks who makes PSL.22 This concept of certificate is somehow similar to the Inter Bank Participation Certificates which is a form of buying assets of other banks to share the risks.

PSL in Todays Banking Environment and the Major Issues:

PSL and Credit Flow at present: RBI is issuing directions to the banks regarding the target, other measures to be taken by the banks to ensure the free flow of credit to the priority sectors. In time, it has setup many working groups and committees to look in to and review the PSL. On the basis of one of the internal working groups recommendations23, RBI has reframed the category of priority sector in the year 2005 to include some other sectors, which will provide employment to the most. RBIs recent Master Circular was published in July, 2011 current instructions for the banks regarding the categories comes under priority sector, target and sub-target set under PSL. At present, the PSL by the banks are meant for the sectors including agriculture, micro and small enterprises, micro credit, educational loans, housing loans, small business, self-employed, software industry and weaker sections.24 Latest annual report of the RBI shows that the rate of PSL by the domestic banks, both public and private sector banks, against their total net bank credit by the end of March 2011 is 43.8 percent.25 After 1996, till date the overall percentage never goes below the target fixed by the RBI. The PSL of 2011 indicated a growth of eighteen percent over

21 Technical Group on Computation of Priority Sector Lending Targets (2000) under the chairmanship of B R Verma. and see Supra note 19. 22 Report of the High Level Committee on Financial Sector Reforms (2008) headed by Raghuram Rajan, under the Planning Commission of India. and see also Priority Sector Lending Certificates, available at: http://www.iibf.org.in/documents/priority_sector_lending_certificates.doc (Visited on November 2, 2011). 23 Supra note 19. 24 Master Circular on Lending to Priority Sectors, July, 2011(RBI/2011-12/107). and see also FAQs on PSL, available at: http://www.rbi.org.in/scripts/faqview.aspx?id=8 (Visited on November 12, 2011). 25 Reserve Bank of India Annual Report, 2010-2011. (by RBI, Published on July 01, 2011).

the previous years (2010) mark. Meanwhile, eight out of forty seven domestic banks were not able to meet the PSL target of forty percent of their net bank credit.26 Further at end-March 2011, the total amount of deposits collected under RIDF scheme reached ` 95,785 crore. The number of projects under RIDF XVI increased as compared to its previous tranche.27 The Union Budget 2011-12 announced to setup RIDF XVII with a corpus of `18,000 crore. RBI in its 2011 master circular directed the banks to have machinery at their regional offices to receive complaints regarding any issues in PSL by any of its branch and to ensure the discretion of all branch managers in sanctioning loan to the priority sectors without any interference from their higher authority.28 Very recently, RBI informed that a new committee has been setup under the head of M.V.Nair to reexamine the criteria for classification of a bank credit as a PSL and to suggest new draft guidelines for PSL.29 It was also asked by the RBI to consider the possibility of setting an upper limit for interest rates on credit under the PSL.30 In the recent years the domestic banks are providing credit facilities to the priority sectors by exceeding the target, but the Indian policy of directing loans to the priority sector was criticised by some professionals on its destabilizing effect on the banking system as it is often less profitable and more likely to be non-performing.31 Major issues attached with the PSL which will affect the interest of the banks will be discussed under the following heads. Increase in Priority Sector NPAs: A major problem in the Indian banking system is the slow progress in the management of non-performing assets (NPAs).32 PSL is not such a simple function for the banks because it leads the banks to some problems on NPAs. But the competent and qualified banks do not need to afraid of the NPAs as they can manage those NPAs with other sources of their income in the

Of which seven are public sector banks - Bank of Maharastra, Central Bank of India, Corporation Bank, UCO Bank, Vijaya Bank, IDBI Bank Ltd., Andhra Bank and one private sector bank - South Indian Bank. 27 Report on Trend and Progress of Banking in India 2010-11. (by RBI, published on November 14, 2011). 28 Supra note 24. 29 RBI Forms Panel to Update Priority Sector Lending Norms, available at: http://www.financialexpress.com/news/rbi-forms-panel-to-update-priority-sector-lending-norms/837390/0 (Visited on November 12, 2011). 30 Ibid. 31 Supra note 8 at 2. 32 Milind Sathye, Privatization, Performance, and Efficiency: A Study of Indian Banks, 30(1) VIKALPA 7(Jan Mar 2005) also available at: http://www.vikalpa.com/pdf/articles/2005/2005_jan_mar_7_16.pdf (Visited on November 2, 2011).

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LPG era.33 As rightly observed by the Narasimham committee, directed credit had led to an increase in NPAs and had adversely affected the efficiency of banks. The increase in NPAs is a serious threat to the banking system and a proper system must be there to identify and classify NPAs. Department of Banking Supervision in the year 1999 examined the mark of PSL on the increase in NPAs and observed that the NPAs in priority sectors is much higher than the NPAs in non-priority sectors. We can see the share of NPAs under priority sector increasing since 1999 and at present it has touched 42.5 percent34, though the gross NPA ratio of all domestic banks was only 2.52 percent by the end of June, 2011. Comparing the previous years net NPAs growth of 23 percent, 2010-11 has registered a lower growth of only 8 percent. Various experts have argued that since the proportion of priority sector NPAs is high it is high time for the central banks and the government to re-examine the existing policy to determine the appreciable policies and measures which will reduce the same. It was observed by RBI that the major reasons for high growth of priority sector NPAs are the directed and preapproved nature of loans sanctioned, absence of security, lack of effective follow up the accounts, cost effective legal recovery measures, etc.35 RBI and the Government of India have undertaken several measures to curtail the NPA problem even by introducing a new legislation36, as recommended by the second Narasimham committee, to provide a speedy recovery process for the banks. But there was an argument that even after the enforcement of the special legislation more than fifty percent of the projected NPAs are concentrated in the priority sector and the act focused only on the recovery of dues from the big industrial and companies.37 It was observed in some studies that though the priority sector NPAs is higher than non-performing NPAS, it is primarily due to the poor awareness of the problem of bad loans at the bank level.38

R.K. Uppal, Priority sector advances: Trends, issues and strategies, 1(5) Journal of Accounting and Taxation 79 (Dec 2009). 34 Priority Sector NPAs of all domestic banks (58.1% of NPAs on public sector banks and 26.8% of NPAs on private sector banks. in the country. From the examination of the table in supra note 27, it is clear that the priority sector NPAs of public sector banks are rapidly increasing and the same in case of private sector banks are under control. 35 Supra note 12 at 3573. 36 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. 37 Shantanu Jugtawat, SARFAESI Act-An Effective Remedy for Secured Creditors, available at: http://www.nliu.com/new/Art12.pdf (Visited on November 14, 2011). 38 Meenakshi Rajeev , Non-Performing Assets in the Indian Banking Sector, available at: http://www.saneinetwork.net/pdf/SANEI_VIII/6.pdf (Visited on November 12, 2011) at265.

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Less Profit and ROI: Another major issue noted with PSL by the banks is about the impact of directed loans on the profitability and earning efficiency of banks. It was a question not only of the banks but also the section of society to whom the banks wish to provide credit facilities, that why should the banks in the liberalised era, soil their hands in lending more to those disadvantaged sectors.39 One of the important reasons considered by experts for the poor profitability of banks has been their increasing involvement in prescribing mandatory credit entailing rigid target setting and the concessionality.40 When the credit to priority sector becomes sticky and non performing, which in turn do not yield any income to the banks. Thereby there is a general perception that PSL might always leave the bank with low or no profit.41 In the year 2004, the World Bank has blamed RBI for its strict PSL norms for domestic and foreign banks with the reason that this policy affects the income and leads to the weak financial health of the banks.42 Despite the perception that PSL will always have an adverse effect on the earnings of the banks, very interestingly Indian Bank in the year 2006 has surpassed the lending norms to cross 50 percent and at the same time came up with an extensive profit and less priority sector NPAs. The then Chairman and Managing Director of Indian Bank K C Chakrabarty43 in a press meet said Our experience of lending to priority sector has been good. Non-performing assets in agriculture, for instance, account for less than 2% of that portfolio. The average net interest margin is around 4% which is much higher than what we would get by lending to corporates.44 If it is possible for one single bank to fulfill the social obligation of lending to the ignored sections of the society and survive without any impact on its profitability, other banks also could achieve it. If one bank has satisfied the directed lending target, it does not always mean that the profitability of the system would necessarily diminish.45 RBI directives for the rate of interest

Priority Sector Credit- Lip Service, 28 Economic and Political Weekly 1128 (1993). Supra note 33 at 88. 41 Supra note 15 on PSL. 42 Sustaining Indias Service Revolution by the World Bank, see also Source: http://www.domainb.com/finance/banks/world_bank/20040615_profits.html (Visited on November 2, 2011) 43 Deputy Governor of RBI from June 2009. 44 Source: http://www.bankresearch.org/economicpolicyblog/2006/02/it_is_more_prof.html also see http://articles.economictimes.indiatimes.com/2006-02-21/news/27442410_1_priority-sector-lending-indian-bank (Visited on November 2, 2011). 45 D N Ghosh, Bank Profitability and Priority Sector Lending: From Populism to Impressionism, 27 Economic and Political Weekly 387 (1992).
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was also much criticised by economist on the point that restriction on compound interest in terms of all agricultural loan will reduce the profit of the banks and the directed credit should be made available only to the poorest of poor and the needy disadvantaged sections of the society. ROI should be charged on commercial basis for those who can afford it.46 In determining of the profitability of the banks, the net interest margin (NIM) is an important factor and in India, though the NIM witnessed a decline during the period of 2004-10, improved during 2010-11.47 Commercial Essentials vs Social Responsibility: As noted earlier, in the LPG market environment where the banks were largely privitised, it is a primary objective of the banking companies to make profit out of their investment. They bankers having commercial obligations of competing with their counterparts should move forward towards their ultimate aim of gaining financial advantage. The regulations and restrictions, in addition with the statutory policies, might seem like a hurdle to the purpose and the goal of the banks, but it should be looked into the economic aspect of the nation as well. There should be some social obligations on the banks in order to achieve a balanced economic growth as the banking system is socially and economically substantial for the promotion of all the financial activities in a country. An element of concession or subsidy for the weaker section of the society is not to be seen as loan consumption. It must be understand as an instrument of enlightened non-market intervention in our credit structure which is encouraging the productive activities in the country.48 Governments intervention in the banking sector in a free-market system was very well justified by C. Ranjgarajan49 that the free-market was seen by the government as unable to optimally allocate resources over time, that is, for investment because of the myopic nature of markets. Therefore, the government forced all public banks to allocate a certain percentage of their total credit for certain important sectors of the economy that the government felt were disadvantaged by the banking system.50 Besides the narrow view on PSL and its impact on banks profitability, RBI is now allowing banks to undertake non-traditional banking businesses
Supra note 4 at 95 (Rajagopal). Supra note 27 at 73. 48 Supra note 45. 49 Governor of RBI from 1992 to 1997. 50 Mark Miller, Political Economy of Directed Credit, State, Market and Economy 98, available at: http://ccsindia.org/ccsindia/policy/money/studies/wp0030.pdf (Visited on October 21, 2011).
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like insurance etc. which is providing a huge profit and efficiency to the banks. And in addition PSL has not had an adverse effect on profitability and cost efficiency.51 Conclusion: In countries like India having a large section of population living below poverty line and where unemployment rate is high, it is important on the part of the government to impose restrictions and regulations over the financial sector for the overall economic growth of the nation. Even in the liberalised market structure the banks should not vested with free choice to do business as they like and such policies restricting the free functioning of the banks in turn protects and promote the banking system as well. Recent 2008 economic crisis was the best example for the success of RBIs control over Indian banking system in the LPG environment. The credit deployment should not be fixed for an advantaged class of the society and the banks should not look only on the short term profits and the higher interest rates, it will lead to the closure. Low ROI alone is not the reason for less profitability and in fact, the restricted interest rates will never affect the profit of the banks. RBI is keeping a good balance between the social and commercial considerations by fixing a rigid target of 40% and by extending the scope of PSL to include different sectors in order to relax the banks to ensure their profit after achieving the target. It might be reasonable for those so called economic experts of the developed fronts to criticise RBIs control over the commercial banks, but PSL is an integral part of the economy in promoting equitable economic growth in the country. Though there might be some governmental & political reasons behind the stiff norms regarding PSL, it is useful in making the credit facilities available to the disregarded and underprivileged part of the economy.

Suyari Shirai, Assessment of Indias Banking Sector Reforms from the Perspective of the Governance of the Banking system, available at: http://www.unescap.org/drpad/publication/fin_2206/part4.pdf (Visited on November 2, 2011).

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http://www.networkideas.org/featart/may2006/Financial_Liberalization.pdf (Visited on November 11, 2011). Christian Roland, Banking Sector Liberalization in India, available at:

http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN024227.pdf (Visited on November 6, 2011). D N Ghosh, Bank Profitability and Priority Sector Lending: From Populism to Impressionism, 27 Economic and Political Weekly 387 (1992). Jaynal Ud-din Ahmed, Priority Sector Lending By Commercial Banks in India: A Case of Barak Valley, available at: 2(1) Asian Journal of Finance and Accounting 92 (2010). and also http://macrothink.org/journal/index.php/ajfa/article/download/75/384

(Visited on October 21, 2011). K M Shajahan, Priority Sector Bank Lending: Some Important Issues, 33 Economic and Political Weekly 2749 (1998). K M Shajahan, Priority Sector Lending: How Useful?, 34 Economic and Political Weekly 3572(1999).

Manish Jain and Amita Verma, Liberalisation, Privatisation and Globalisation Model, 2(6) International Research Journal 758. also available at:

http://www.ssmrae.com/admin/images/4444ead379edeac18d62438123a155bd.pdf (Visited on November 2, 2011). Mark Miller, Political Economy of Directed Credit, State, Market and Economy 98, available at: http://ccsindia.org/ccsindia/policy/money/studies/wp0030.pdf (Visited on October 21, 2011). Meenakshi Rajeev , Non-Performing Assets in the Indian Banking Sector, available at: http://www.saneinetwork.net/pdf/SANEI_VIII/6.pdf (Visited on November 12, 2011). Milind Sathye, Privatization, Performance, and Efficiency: A Study of Indian Banks, 30(1) VIKALPA 7(Jan-Mar 2005) also available (Visited at: on

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R.K. Uppal, Priority sector advances: Trends, issues and strategies, 1(5) Journal of Accounting and Taxation 79 (Dec 2009). Rajaram Dasgupta, Priority Sector Lending: Yesterday, Today and Tomorrow, 37 Economic and Political Weekly 4239 (2002). Shantanu Jugtawat, SARFAESI Act-An Effective Remedy for Secured Creditors, available at: http://www.nliu.com/new/Art12.pdf (Visited on November 14, 2011). Suyari Shirai, Assessment of Indias Banking Sector Reforms from the Perspective of the Governance of the Banking system, available at:

http://www.unescap.org/drpad/publication/fin_2206/part4.pdf (Visited on November 2, 2011). Uma S, Problems and Prospects of Priority Sector Lending by Commercial Banks, available at: http://www.isec.ac.in/Theses%20new/problems_and_prospects_if_priority_sector_lendin g_by_commercial_Banks.pdf (Visited on October 25, 2011).

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Web Sources: o http://rbi.org.in o http://wikipedia.org