SME Times News Bureau | 07 Apr, 2021
With a view to ensure continued availability of credit to agriculture,
MSME and housing sectors and aid faster economic recovery, the RBI has
extended the priority sector lending (PSL) classification for lending by
banks to NBFCs for 'on-lending' to the identified sectors for six
months up to September 30, 2021.
Recognising the role played by
NBFCs in providing credit at the bottom of the pyramid it was decided in
August 2019 to allow banks to classify lending to registered NBFCs
(other than MFIs) as PSL up to 5 per cent of a bank's total PSL, for
on-lending to Agriculture/MSME/Housing till March 31, 2020. This
dispensation was later extended up to March 31, 2021.
An amount
of around Rs 37,000 crore has been lent by banks to NBFCs for on-lending
to the specified priority sectors by December 2020.
The
extension will further facilitate NBFCs to support the sectors which
contribute significantly to the economic growth in terms of export and
employment. It will also improve the liquidity position of such
entities.
