Four public sector banks may come under the finance ministry's scrutiny for reporting a fall in credit to agriculture, designated as a priority sector for lending by the Reserve Bank of India. According to a presentation given by state-run banks to finance minister P Chidambaram on October 22, share of farm loans by Central Bank of India, Indian Overseas Bank, Oriental Bank of CommerceBSE -2.83 % and Punjab National BankBSE -3.18 % fell between 0.24% and 25% year-on-year in the quarter to September. In case of a fall in priority sector lending, banks are mandated to invest more with Rural Infrastructure Development Fund, which could be a drag on their profitability this fiscal. Central Bank of India saw the biggest drop, with loans to agricultural sector declining 25% to Rs 4,555 crore. In the year-ago quarter , the bank had disbursed . 6,048 crore to the sector.
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