The Reserve Bank has sought views of stakeholders on the terms of reference of Nair Committee to look into various issues related to priority sector lending, including review of loan limits under the segment.
The stakeholders have been asked to give their views and comments by November 15.
"The RBI has, through a questionnaire, sought views/ comments of all stakeholders on the terms of reference for the Nair Committee on Priority Sector Lending. Comments/ suggestions/views may be emailed latest by November 15, 2011," the Reserve bank of India (RBI) said in a statement.
The committee, headed by former Union Bank of India Chairman and Managing Director M V Nair, was constituted by RBI in August and is expected to submit its report of priority sector lending by the end of December.
Stakeholders' views have been sought on various issues including desirability of simplifying the approach to directed lending, inconsistencies or ambiguities in the existing guidelines, nature of activities presently classified as priority sector that need relook and new areas which should be incorporated.
Besides, they have been asked to name the activities for which the classification changes depending upon the limit of loan amount need to be revisited and ways to ensure that loans given by banks reach the eligible categories, and so on.
The terms of reference of the Nair committee is to revisit the current eligibility criteria for classification of bank loans as priority sector with reference to nature of activities and types of borrowers (individuals versus institutions, corporate and partnership firms) of loans.
It will review nature of activities and types of borrowers (individuals versus institutions, corporate and partnership firms) of loans under priority sector segment.
The terms of reference of the panel include review of limits on loan amounts.
It will also review appropriate documentation and due diligence thresholds to ensure that loans extended by banks are for the eligible categories of purposes and borrowers, which need special attention and treatment, it said.
Besides, the panel will consider the desirability, or otherwise, of capping interest rate on priority loans.
The panel will also review the current allocation mechanism for Rural Infrastructure Development Fund (RIDF) and other funds.
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