BANKING AFFAIRS

Detailed explanation-1: -The Priority Sector Lending Certificates are certificates issued by banks that have overreached their priority sector lending targets. PSLCs thus can be issued only up to the extent of their over lending to the stipulated sectors.

Detailed explanation-2: -Priority sector lending certificates (PSLCs) are certificates that are issued against priority sector loans for banks. They allow banks to meet their targets and sub-targets – when it comes to priority sector lending – by buying the instruments. The banks use PSLCs to guard against shortfalls.

Detailed explanation-3: -18 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher. Within the 18 per cent target for agriculture, a target of 8 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher is prescribed for Small and Marginal Farmers.

Detailed explanation-4: -There are four types of PSLCs: Agriculture, Small/Marginal Farmers, Micro Enterprises and General-that is, other than loans to agriculture and micro enterprises. A bank having shortfall in achievement of any sub-target will have to buy the specific PSLC to achieve the target.