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ARTICLE · 16 DECEMBER 2019

Bank Credit To NBFCs For On-Lending Eligible For Classification As ‘Priority Sector'

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RBI by way of its circular dated August 13, 2019 addressed to all scheduled commercial banks has decided that bank credit to registered NBFC (other than micro finance institutions (‘MFI')) for...

IndiaFinance and Banking
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RBI by way of its circular dated August 13, 2019 addressed to all scheduled commercial banks has decided that bank credit to registered NBFC (other than micro finance institutions ('MFI')) for on-lending will be eligible for classification as 'priority sector' subject to the following conditions:

i. Agriculture: On-lending by NBFCs for term lending component under 'agriculture' will be allowed up to Rs 10,00,000 per borrower;

ii. Micro & Small enterprises ('MSME'): On-lending by NBFCs under 'MSME' will be allowed up to Rs 20,00,000 per borrower; and

iii. Housing: The existing limit for on-lending by housing finance companies ('HFCs') is increased to Rs 20,00,000 per borrower.

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