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RBI Extends Priority Sector Classification For Bank Loans To NBFCs For On-lending

Capital Market 

The Reserve Bank Of India (RBI) has decided to extend the priority sector classification for bank loans to NBFCs for on-lending for FY 2020-21. Further, existing loans disbursed under the on-lending model will continue to be classified under Priority Sector till the date of repayment/maturity.

Bank credit to registered NBFCs (other than MFIs) and HFCs for on-lending will be allowed up to an overall limit of five percent of individual bank's total priority sector lending. Further, banks shall compute the eligible portfolio under on-lending mechanism by averaging across four quarters, to determine adherence to the prescribed cap.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 23 2020. 15:31 IST
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