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RBI extends priority sector classification for bank loans to NBFCs

This is part of steps to provide support for financial sector entities to deal with slowdown and aftermath of COVID-19

BS Reporter  |  Mumbai 

RBI
RBI

The Reserve Bank of India has extended the priority sector classification for to non-banking financial companies (NBFCs) for on-lending for FY21.

The classification benefit was to be available till March 31.This is part of steps to provide support for financial sector entities to deal with slowdown and aftermath of COVID-19.Further, existing loans disbursed under the on-lending model will continue to be classified under priority sector till the date of repayment/maturity, RBI said in communication to

The credit to NBFCs, other than micro-institutions and housing companies, for on-lending will be allowed up to an overall limit of five percent of bank’s total priority sector lending.Further, will compute the eligible portfolio under on-lending mechanism by averaging across four quarters, to determine adherence to the prescribed cap.

First Published: Mon, March 23 2020. 22:35 IST
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