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RBI extends facility of priority sector lending-banks lending to NBFCs for on-lending till 31-3-2021

The Reserve Bank of India (RBI) extended the facility of Priority Sector Lending - Banks’ lending to NBFCs for on-lending wherein the facility of bank lending to NBFCs (other than MFIs) for on-lending was allowed to be classified as PSL up to 30 September 2021.

As announced in the ‘Statement on Developmental and Regulatory Policies’ dated 8 October 2021, the facility has been extended till 31 March 2022 keeping in view the increased traction observed in delivering credit to the underserved/unserved segments of the economy. Loans disbursed under the on-lending model will continue to be classified under Priority Sector till the date of repayment/maturity whichever is earlier. Further, bank loans to HFCs for on-lending for the purpose of housing, as prescribed in para 23 of our MD on PSL dated September 4, 2020, will continue as hitherto.

All other guidelines as issued vide MD on PSL ibid will continue to apply.

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