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Will Now FOBs Really Give Priority to Priority Sectors? by Anirudh Rajan

With Priority Sector Lending Quotas becoming fully applicable to Foreign Owned Banks (FOBs), agrarian lending should expect a substantial boost in the coming year. This may not necessarily be the case though, as FOBs have proven adept at delaying and avoiding regulation, often using loopholes to skirt them completely. 
Last Thursday, Reserve Bank of India (RBI) issued a circular reaffirming that foreign owned banks (FOBs), having over 20 branches in India, meet sub-targets for loans to small and marginal farmers in priority sector lending. Set at 8% of Adjusted Net Bank Credit (ANBC), out of the 18% earmarked for the agrarian priority sector, the circular directs Standard Chartered Bank, Citibank and HSBC to start allocating a fifth of their priority sector loans to famers with landholdings less than 2 hectares, tenant farmers, share-croppers and landless agrarian labour. 
FOBs, for the longest time, were allowed to comply with concessional rates of priority sector lending. Up to 2012-1…
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GST Round-Table Organized by Business Standard on the 6th of September 2017, New Delhi

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