23rd May 2002

RPCD/ PLNFS/BC No.94 /06.02.31/2001-02

All Scheduled Commercial Banks

Dear Sir,

Inclusion of Leasing and Hire Purchase Assets
Under Priority Sector.

As per instructions contained in Circular DBOD.No.FSC.BC.18/24.01.001/93.94 dated 19 February 1994 banks can extend para bank facilities such as leasing and hire purchase financing at select branches departmentally and these are treated on par with loans and advances. These facilities are available inter-alia to eligible SSI units.

2. With a view to augment the flow of credit to SSI sector it has been decided that such para banking facilities extended by banks at selected branches departmentally may be classified as priority sector advances provided the beneficiary satisfies the criteria laid down by RBI for treating such advances as advances to priority sector.

Yours faithfully,

(Sujatha Elizabeth Prasad)
General Manager