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Priority sector lending under rbi

(Querist) 24 August 2017 This query is : Resolved 
Dear Sir/Madam, I want to know whether commercial banks operating in India are bound to abide by each and every rule prescribed by the top bank (RBI)? i have seen many banks don't provide any loans under priority sector lending policy like MUDRA and CGTMSE even though there is a clear mandate from RBI that they should.what action can be taken if a bank don't want to talk to a customer from priority sector lending policy who wants to stand on his own feet by setting up a business? my next question is if my CIBIL score 800+ and all my documents are in order and bank don't want to give me any loan under priority sector lending policy, what action can be taken against in this respect?
ROHIT SHARMA (Expert) 25 August 2017
1) Yes, all the nationalised, private and scheduled banks have to rather follow the guide lines of R.B.I.
2) There is no dearth of such banks. If one of them refuses than seek another bank.
4) The crisis rating you have is a mark for your individual status.
5) First of all register your firm, be it proprietorship, partnership and then surge ahead to get capital or working loans.
6) Just approaching a bank with request to give you a a loan in personal name cannot be deemed to be loan given to priority sector.
4) Organize your plan starting with registering a company under the Company Act, 2013.
5) Be determined to achieve the goal sought to stand up on your own legs and become an entrepreneur.
ADV. ROHIT SHARMA.
R.K Nanda (Expert) 26 August 2017
you can file complaint in banking ombudsman against concerned bank.
Rajendra K Goyal (Expert) 27 August 2017
You asked:
, I want to know whether commercial banks operating in India are bound to abide by each and every rule prescribed by the top bank (RBI)?
Reply:
Yes.

You asked:
i have seen many banks don't provide any loans under priority sector lending policy like MUDRA and CGTMSE even though there is a clear mandate from RBI that they should.
Reply:
Bank provide loan to priority sector as % of total loans. There is possibility that the target are fulfilled. Moreover, only applying the loan under priority sector does not entitle an applicant for the loan, Bank analyze the proposal / application from a no. of angles, i.e., entitlement, prospectus, budget availability, whether scheme approved, repayment capacity, marketing prospectus, future fund generation etc.
Rajendra K Goyal (Expert) 27 August 2017
You asked:
what action can be taken if a bank don't want to talk to a customer from priority sector lending policy who wants to stand on his own feet by setting up a business?
Reply:
In most of cases the priority sector loan application is sponsored from District / state / government agencies. Apart from above Banks try to fulfill targets by employing funds in less risky schemes like Bonds in lieu of the loan.
Rajendra K Goyal (Expert) 27 August 2017
You asked:
my next question is if my CIBIL score 800+ and all my documents are in order and bank don't want to give me any loan under priority sector lending policy, what action can be taken against in this respect?
Reply:
You can try from another Bank. Can use RTI to get information. Lodge complaint with the higher authorities.
krishna mohan (Expert) 07 September 2017
Every Bank has a specialized branch or cell to help MSME (or) Grievance mechanism within the Bank to represent if you are convinced that they are not implementing the policy of RBI. Alternatively you can seek the help of NSIC or MSME for right guidance.


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