FOREIGN BANKS' ARMS TOO MUST MEET 40% PRIORITY SECTOR LENDING TARGET: RBI

Foreign banks set up as wholly-owned subsidiaries will be required to meet the priority sector lending target of 40 per cent of adjusted net bank credit, which is the same for domestic commercial banks, said the Reserve Bank of India(RBI), in its discussion paper. The Central Bank has, however, proposed to prescribe a lower sub-target of 10 per cent for lending to agriculture sector by the wholly-owned subsidiaries, since the branch spread of these banks will be limited. New Norms-Wholly-owned subsidiaries set up by conversion of existing branches may be allowed a transition period of five years from the year in which they incorporate in India for meeting priority sector lending norms