Extending loans and advances to the needy sectors of the economy on a priority basis is a very crucial function of the banking sector. Keeping in view needs of the Indian economy, banks are mandated to extend 40 per cent of their Net Bank Credit to the priority sectors of the economy.
The priority sectors of the economy include, inter alia, agriculture, weaker sections, small scale industries, education and micro finance. These norms ensure adequate flow of funds to the most important and needy sectors of the economy. But as you are also aware, over the years, banking has transformed. It is no longer the “3-6-3” banking.