Module: | Priority Sector, Consumer Protection & Digital Lending
Q41: Consider the following statements regarding the MSME, Start-ups, and Export Credit Thresholds under priority sector guidelines:
1. Loans up to ₹50.00 crore to Start-ups are eligible for priority sector classification under both the Micro, Small and Medium Enterprises (MSME) and 'Others' categories.
2. All bank loans extended to units situated in the Khadi and Village Industries sector shall be exclusively categorised as lending to Micro Enterprises.
3. For Domestic Banks, Export Credit is capped at 2% of Adjusted Net Bank Credit subject to a strict sanctioned limit of ₹50.00 crore per borrower, and this provision is fully applicable to Regional Rural Banks.
4. Bank loans to Non-Banking Financial Companies (NBFCs) for the purpose of on-lending to Micro and Small Enterprises are strictly capped at ₹20.00 lakh per borrower.
Which of the statements given above is/are correct?
2. All bank loans extended to units situated in the Khadi and Village Industries sector shall be exclusively categorised as lending to Micro Enterprises.
3. For Domestic Banks, Export Credit is capped at 2% of Adjusted Net Bank Credit subject to a strict sanctioned limit of ₹50.00 crore per borrower, and this provision is fully applicable to Regional Rural Banks.
4. Bank loans to Non-Banking Financial Companies (NBFCs) for the purpose of on-lending to Micro and Small Enterprises are strictly capped at ₹20.00 lakh per borrower.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statement 3 is incorrect: The Master Directions explicitly state that the Export Credit provisions (Para 11), which cap limits at 2% of ANBC and ₹50.00 crore per borrower, are NOT applicable to Regional Rural Banks (RRBs) and Local Area Banks (LABs). Statements 1, 2, and 4 are mathematically and legally correct: Start-ups get up to ₹50.00 crore under MSME/Others, Khadi and Village Industries are strictly classified as Micro Enterprises, and NBFC on-lending limits for Micro/Small Enterprises are capped at ₹20.00 lakh per borrower.