Circular on Priority Section Lending certificate | CA Final IDT | CA Ramesh Soni

Do you mean by pslc people p s l c what is pslc priority priority sector lending certificate okay very simple way i’ll explain you you tell me one thing sir will not get into the technic technicalities or priority sector lending certificate we are not doing any banking exam we’ll understand it in a very simple manner you tell me one thing what is the priority sector

Of the country priority sector car lending certificate priority sector if i tell you agriculture is agriculture the priority sector in the country is agriculture the priority sector yes what happened one bank is state bank of india and one bank is icici bank check everyone rbi has gone in and told that every bank out of their total loan portfolio at least 20

Percent of the loan should be given to agriculture would be given to whom agriculture sbi went ahead and gave 25 percent of its loan out of the total loan portfolio 25 of the loan is given for agriculture has sbi gone ahead and made the criteria yes sir at least how much should have been given to priority sector 20 should have been given to the priority sector which

Is agriculture they have given 25 percent means they have five percent of the loans are extra which they have given to whom priority sector is my point clear you know what happened icici went ahead and gave only 15 percent of their loan to the priority sector how much they have given only 15 percent of the loans have been given to priority sector how much is the

Minimum requirement 20 of the loan should be given to priority sector how much is the default they have done they have given five percent less loan to the priority sector do you guys agree with me that icici has defaulted do you guys agree that icici has defaulted you know to make this default correct icici can go ahead and buy priority sector lending certificate

From other bank papa has has the bank gone ahead and defaulted yes sir five percent loan they should have given more to the priority sector which they have not given yes or no now out of their total loan portfolio that five percent of the loan which they have not given to the priority sector they can make this default correct how they can approach state bank of

India and tell sir have you given some extra loan to any priority sector they will tell yes sir we have given five percent we have given this much amount car loan this much amount loan extra to the priority sector what rbi has allowed is what sbi can do sbi can go ahead and make a certificate and sell it to the other bank icic sbi will say what sbi will say okay i

Will give you a priority sector lending certificate how much amount what is your default amount out of the total loan amount whatever is your default for example icici sega total loan portfolio is 100 crore out of 100 crore five percent is not given to priority sector so they want a priority sector lending certificate with respect to the agricultural loan correct

Or not so they will go ahead and approach state bank of india and say sir 5 crore rupees per loan we have not given we have defaulted how much cologne five crore five crore rupees cologne which should have given more to agriculture sector so you do one thing you give us a priority sector lending certificate have you given extra loan to priority sector as we will

Say yes so sbi will issue one certificate to them see loan doesn’t get transferred from that bank to this bank but it is just a certificate which will be issued by whom state bank of india to home to icici saying that okay this is a priority sector lending certificate which we are given to you so what state bank of india will do state bank of india will sell this

Priority sector lending certificate to whom icici icici got that amount of five percent loan which was there five crore rupees priority sector lending certificate but default corrected huh yes however this is one way the bank makes money if i am a state bank of india and i am giving extra loan to agriculture that extra loan what i can do whoever has defaulted how

Much ever amount a loan certificate they want we can go ahead and issue what certificate and it’s a legal practice these certificates are sold on the e-cover website of the rbi are we clear everyone so bank who wants it they can go to e kuber so what will happen everyone whichever bank has extra they are the seller whichever bank has gone ahead and defaulted who

Are they buyer so what will happen is buyers can go to ecoberg website in ecoberg website this bank will go ahead and list down its pslc and this bank can go ahead and buy it once you buy your default gets corrected are we clear everyone so what is the benefit of pllc this bank could not lend it out might be icici is only in uh cities and they are telling sir we

Are lending more to other sector we are not lending to agriculture what to do default is there so what they can do is might be state bank of india has lot of people who are going ahead and taking loan for agriculture so state bank of india will get an opportunity to earn money by sending it selling its certificate are we clear everyone so what will state bank of

India do over here they will make what priority sector lending certificate they will go to the ecomare website and eco bear website get so this certificate will be sold are we clear that’s what they have gone ahead and told sir priority sector lending certificates are not securities now bank went dead and sold sir when i’m sending my pslc certificate because it is

Sold on an online platform just like share shares are also sold online uh pslc certificate are also sold online when shares are sold shares where there is no gst so pslc certificate also when i am selling there is no gst government told wait bubba wait bank baba these are not securities these are goods priority sector lending is it immobile property it is movable

Property it is goods and if it is goods it is always taxable as foods are we clear everyone and then now you tell me one thing the state bank of india know that icici has bought the certificate no one bank when it is selling to another bank the certificate when it is bought by the other bank both the banks don’t know each other because who is there in between

Website which is maintained by rbi e-cover website is then between both the banks don’t know each other i don’t know who are you where are you do i know you are within the state or outside the state do i know whether are you within the state or outside the state if i don’t know will i pay cgst central government told baba when you don’t know anything paid to us

Charge idst and pay to us are you guys able to understand when you don’t know now this both banks don’t know each other so what will happen over here when i don’t know the other bank in that scenario government went into an intra i told sir intra or inter government told papa when you don’t know anything please come to me and the central government charge igs and

Give it to me are you guys able to understand whenever it is whenever it is when you don’t know whether intra or enter so government waited and clarified please take that supply to be what interested so whenever pslcs are sold through the ecoberg website never this bank will know about the other bank so in this scenario always what will happen interstate supply

And always what will be charged is icst igst cell b payable is my point clear to all about priority sector lending certificate so whenever one bank is going ahead and selling to another bank pslc pslcs are first of all goods nature of supply will always be interested and what will be always payable igst and this was a clarification which was given i hope everyone is clear with pslc now

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Circular on Priority Section Lending certificate | CA Final IDT | CA Ramesh Soni By CA Ramesh Soni