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Compositional Growth and Variation of Priority Sector Lendings’ (PSL) by Assam Gramin Vikash Bank

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Indian Journal of Economics and Development
Volume 16 No. 2, 2020, 296-300
DOI: https://doi.org/10.35716/IJED/19077
Indexed in Clarivate Analytics (ESCI) of WoS

Sijousa Basumatary1, Dulumoni Baruah2 and Mridula Devi3

1Assistant Professor; 2Research Scholar and 3Associate Professor, Department of Economics, Bodoland University, Kokrajhar-783370 (Assam)

Corresponding author’s email: sbbasu6@gmail.com

ABSTRACT
Banks in India are directed by the Reserve Bank of India to provide specified proportion (40 percent of adjusted net bank credit) of the bank loans termed as Priority Sector Loans (PSL) to the specified sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low-income segments of the rural population. This is essentially meant for all-round development of the economy as opposed to focusing only on the financial sector. Likewise, Assam Gramin Vikash Bank is a Regional Rural Bank operating in rural areas of Assam meant for serving the needs of the rural populations. Assam Gramin Vikash Bank was successful in attaining the quantitative target prescribed for the RRB i.e. a target of 40 percent lending to the priority sector. The major share of PSL loans (43 percent) goes to the agriculture and allied sectors. The Levene’s test result revealed that there was no significant variation in the two different types of loans provided by the AGVB, namely PSL and other types of loans. Furthermore, the independent t-test result also revealed that there was no significant difference between the mean values of the two different types (PSL and Non-PSL) of loans provided by the AGVB, implying that the share was consistent separately throughout the period 2010-2017. It was found that the amount of PSL loans provided by the AGVB was consistently increasing by `365.9 crores per annum. However, the annual growth rate of the PSL loans, sub-sector wise was found to be declining drastically for all the sectors for the period 2010-2017.

Keywords
Consistent, loans, priority sector, rural areas.

JEL Codes
G21, G28, H21, Q14.

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