The priority sector lending targets for Scheduled Commercial Bank are defined by RBI in terms of percentage of Adjusted Net Bank Credit (ANBC). The banks have to lend 40% of their ANBC to priority sector. Today let’s understand what Adjusted Net Bank Credit (ANBC) is.
Adjusted Net Bank Credit (ANBC)
ANBC is the net banking credit after taking into account bill discounting, non-SLR securities and other exemption via long-term bonds.
Computation of Adjusted Net Bank Credit (ANBC)
| Bank Credit in India [As prescribed in item No.VI of Form ‘A’ under Section 42 (2) of the RBI Act, 1934] |
I |
| Bills Rediscounted with RBI and other approved Financial Institutions |
II |
| Net Bank Credit (NBC) |
III = I-II |
| Bonds/debentures in Non-SLR categories under HTM category+ other investments eligible to be treated as priority sector +Outstanding Deposits under RIDF and other eligible funds with NABARD, NHB, SIDBI and MUDRA Ltd. on account of priority sector shortfall + outstanding PSLCs |
IV |
| Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable housing |
V |
| Eligible advances extended in India against the incremental FCNR (B)/NRE
deposits, qualifying for exemption from CRR/SLR requirements |
VI |
| ANBC |
III + IV – V – VI |
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