EXCERPTS FROM A CHINA DIARY

mance [of the banks] in respect of priority lending has been positively unsatisfactory, especially since the deceleration in lending to these sectors has occurred just when the banking system was highly liquid". Though the banks have been set a target of 33.1/3 per cent of total credit to the priority sectors (compared to the present level of about 28 per cent), the share of priority sectors in incremental credit expansion during the current financial year upto October actually declined to 31 per cent from 55 per cent in the corresponding period of the last financial year. As a result, the average ratio of priority sector advances which had gone up from 25.7 per cent in March had remained at 28.4 per cent in October