LIC AAO Model Paper 1

Under the Priority Sector Lending, banks have to spend up to 40 percent of their loans on priority sectors (agriculture, micro and small enterprises, education, housing, export credit and others). Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. The rate of interest on various priority sector loans are as per RBI’s directives issued from time to time, which is linked to Base Rate of banks at present.