Bank Lending Under Priority Sector in Assam (Concept, Composition and Growth)

It was during the post-nationalisation period that priority sector lending and social banking concepts were crystalised and adopted for the purpose of credit deployment. The word “priority sector” is used for those activities that have national importance and have been assigned a priority for development, but which have not received due attention from the private sector commercial banks. Hence, in the scheme of social control, emphasis was laid on larger allocation of bank credit mainly to three important sectors, namely, agriculture, small-scale industries and exports, which were termed as ‘priority sector’. The scope of priority sector was subsequently broadened so as to include other sectors later and some target was fixed by the Reserve Bank of India. Since nationalisation, the scheduled commercial banks have been engaged in the task of bringing about the desired change in the attitude and approach of banks in regard to their priorities, vis-à-vis the services rendered by them. No doubt, the quantitative changes are perceptible in this regard, but the qualitative changes have not been assessed in terms of pronounced policies.

It has, therefore, become necessary to have a thorough, systematic and scientific study for those who are involved in credit portfolio, as lending is considered as the most important function of the bank.