RPCD. Plan. BC. 16 / 04.09.01/ 2001-02

29 August 2001

The Chairman/ Managing Director /
Chief Executive Officer
[All scheduled commercial banks]

Dear Sir,

Priority sector lending –
Loans to food and agro-based processing sector

Please refer to our circular letter No. RPCD. Plan. BC. 60/ 04.09.01/ 98-99 dated 28 January 1999 advising that loans to food and agro-based processing sector would be included under priority sector advances. We have now been advised by Government of India, Ministry of Finance that the following items within the food and agro-based processing sector would be eligible for classification as priority sector for lending by banks :

• Fruit and vegetable processing industry
• Food grain milling industry
• Dairy products
• Processing of poultry and eggs, meat products
• Fish processing
• Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoa processing and chocolate), malt extract, protein isolate, high protein food, weaning food and extruded/ other ready to eat food products
• Aerated water/ soft drinks and other processed foods
• Special packaging for food processing industries
• Technical assistance and advice to food processing industry

2. With regard to the size of the units within this sector, it is clarified that food and agro-based processing units of small and medium size with investment in plant and machinery up to Rs 5 crore would be included under priority sector lending.

3. In view of the above, you may please include loans satisfying the above criteria under priority sector. While loans to units falling under SSI definition may be shown under advances to SSI in the half-yearly statements on priority sector lending, loans to other units should be shown separately, as hitherto.

4. Please acknowledge receipt.

Yours faithfully,

(Vani J. Sharma)
Chief General Manager