Home › Circulars › RBI/2009-10/495

Priority Sector Lending: Export Credit to MSEs & Agriculture by UCBs

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/495 · issued 15 Jun 2010 · ~2 min read
Quick answerRBI clarifies that loans to Micro and Small Enterprises (MSEs) qualify as priority sector regardless of export or domestic use, provided they meet MSMED Act 2006 definition. Similarly, all agriculture and allied loans are priority sector. Export credit to these must be reported separately in Statement II.

What changed

RBI issued a clarification on June 15, 2010, confirming that loans to MSEs (manufacturing and services) are eligible for priority sector classification if they satisfy the MSMED Act 2006 definition, irrespective of whether the finance is for export or domestic activities. It also reiterated that all loans to agriculture and allied activities qualify as priority sector, with export credit to these sectors requiring separate reporting in Statement II.

What it means for you

Urban Co-operative Banks can now confidently classify all MSE loans (export or domestic) as priority sector, provided the borrower meets MSMED Act criteria. This expands the priority sector lending pool for UCBs and simplifies compliance. Separate reporting of export credit to MSEs and agriculture in Statement II is mandatory for accurate regulatory submissions.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

Primary (Urban) Co-operative Banks, MSE borrowers (manufacturing and services), Agriculture and allied activity borrowers

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular change the priority sector eligibility for MSE loans that are not for exports?

No. It clarifies that MSE loans are eligible for priority sector classification whether for export or domestic activities, as long as the borrower meets the MSMED Act 2006 definition.

How should we report export credit to MSEs and agriculture in our returns?

Report export credit to MSEs separately under 'Export Credit to Micro and Small Enterprises Sector' and export credit to agriculture under 'Export Credit to Agriculture Sector' in Statement II of the priority sector returns.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1700: UBD.CO.BPD.No.70/09.09.001/2009-10 — "Priority Sector Lending - Advances to Micro and Small Enterprises engaged in Exports and Export Credit to Agriculture an”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/495 UBD.CO.BPD.No. 70 /09.09.001/2009-10 June 15, 2010 The Chief Executive Officers All Primary (Urban) Co-operative Banks Dear Sir, Priority Sector Lending – Advances to Micro and Small Enterprises engaged in Exports and Export Credit to Agriculture and Allied Activities –UCBs Please refer to our Master Circular no. 7 dated July 1, 2009 on ‘Priority Sector   Lending’. In this connection, it is clarified that loans granted to Micro and Small Enterprises (MSE) (manufacturing and services) are eligible for classification under priority sector provided such enterprises satisfy the definition of MSE sector as contained in MSMED Act 2006, irrespective of whether the finance is for export activities or domestic activities. The export credit granted to MSEs may be reported separately as “Export Credit to Micro and Small Enterprises Sector” in Statement II. 2. Similarly, all loans granted to agriculture and allied activities are eligible to be classified as priority sector loans. The export credit granted for agriculture and allied activities may be reported separately under heading “Export Credit to Agriculture Sector” in Statement II. Yours faithfully (Uma Shankar) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/495 · issued 15 Jun 2010. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5727&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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