Year-End Priority Sector Certification at Poonthura Branch
It is 28 March, with two working days left in the financial year. The Poonthura branch has an Adjusted Net Bank Credit of ₹120 crore. The branch dashboard shows targets of 40% of ANBC for overall priority sector, 12% for weaker sections and 7.5% for micro enterprises. Achievement as on date: priority sector ₹41.40 crore, weaker sections ₹11.20 crore, micro enterprises ₹7.50 crore.
The branch's quick-reference card, circulated by the circle, states: micro and small enterprise loans count in full as priority sector; a housing loan to an individual counts only up to ₹35 lakh per dwelling unit, irrespective of the sanctioned amount; education loans count as priority sector and, where household income is below ₹2.50 lakh, also as weaker section; crop loans to farmers holding up to 2 hectares count as priority sector and weaker section but not as micro enterprise. PSLCs may be purchased at ₹1.05 lakh per ₹1 lakh of shortfall, within a circle budget of ₹60 lakh; no PSLC is available for the weaker-section gap, which must be parked in the RIDF at zero interest.
Four files can be disbursed before 31 March: (i) ₹3.00 crore to a micro manufacturing unit, fully eligible; (ii) ₹2.20 crore housing loan to an individual; (iii) ₹1.50 crore education loan, household income ₹2.10 lakh; (iv) ₹1.20 crore crop loan, farmer holding 1.8 hectares.
1. Compute the three shortfalls - overall priority sector, weaker sections and micro enterprises - in rupees crore and as a percentage of ANBC.
Read the worked answer
| Segment | Target | Target ₹ crore | Achieved ₹ crore | Achieved % | Shortfall ₹ crore | Shortfall % of ANBC |
|---|---|---|---|---|---|---|
| Priority sector | 40% | 48.00 | 41.40 | 34.50% | 6.60 | 5.50% |
| Weaker sections | 12% | 14.40 | 11.20 | 9.33% | 3.20 | 2.67% |
| Micro enterprises | 7.5% | 9.00 | 7.50 | 6.25% | 1.50 | 1.25% |
Working: 40% × 120 = ₹48.00 crore; 12% × 120 = ₹14.40 crore; 7.5% × 120 = ₹9.00 crore. Shortfalls are simple subtractions, but note the percentage-of-ANBC column - the weaker-section gap of ₹3.20 crore is a larger policy exposure than the headline suggests, because the sub-target is small and the miss is proportionately severe (target 14.40, achieved 11.20, a 22% shortfall against the sub-target).
2. Assuming all four files are disbursed on 30 March, compute the resulting achievement in each of the three segments and identify exactly what remains uncovered.
Read the worked answer
Amounts that actually count:
- (i) Micro unit ₹3.00 crore → priority sector ₹3.00 crore + micro enterprise ₹3.00 crore
- (ii) Housing ₹2.20 crore → only ₹0.35 crore counts as priority sector; the remaining ₹1.85 crore earns no priority-sector credit
- (iii) Education ₹1.50 crore → priority sector ₹1.50 crore + weaker section ₹1.50 crore
- (iv) Crop loan ₹1.20 crore → priority sector ₹1.20 crore + weaker section ₹1.20 crore
Additions: priority sector ₹6.05 crore; weaker sections ₹2.70 crore; micro enterprises ₹3.00 crore.
| Segment | New achievement | Target | Position |
|---|---|---|---|
| Priority sector | 41.40 + 6.05 = 47.45 | 48.00 | Short by ₹0.55 crore |
| Weaker sections | 11.20 + 2.70 = 13.90 | 14.40 | Short by ₹0.50 crore |
| Micro enterprises | 7.50 + 3.00 = 10.50 | 9.00 | Surplus ₹1.50 crore |
The obvious trap is to count all ₹2.20 crore of housing. Doing so would show a comfortable surplus while the certified return would still fail the audit.
3. Recommend what the branch should do in its last two working days, including any PSLC or RIDF action, and state the cost of each option.
Read the worked answer
Book all four files on or before 31 March - the disbursement date decides which year's ANBC they belong to, so the ₹1.85 crore of housing that earns no credit is still a legitimate loan, but it must not be presented as priority sector.
Priority sector gap of ₹0.55 crore: purchase PSLC. Cost = 55 lakh × 1.05 = ₹57.75 lakh, inside the ₹60 lakh circle budget with ₹2.25 lakh to spare. So the budget is exactly sized for this gap and no more – do not commit PSLC funds before the four disbursements are confirmed in the system.
Weaker-section gap of ₹0.50 crore: no PSLC exists, so the only compliant route is an RIDF deposit at zero interest - ₹50 lakh deployed with no return, which is a real cost to the branch's earnings. Two days is not enough to build a genuine weaker-section pipeline, so deposit the shortfall rather than misclassify anything. A crop loan relabelled as micro, or a housing loan counted in full, would convert a small financial cost into a supervisory finding. Flag the recurring weaker-section gap to the circle for a Q1 pipeline target.