Mumbai: With a view to make sure continued availability of credit score to agriculture, MSME and housing sectors and support quicker financial restoration, the RBI has prolonged the precedence sector lending (PSL) classification for lending by banks to NBFCs for ‘on-lending’ to the recognized sectors for six months as much as September 30, 2021.
Recognizing the position performed by NBFCs in offering credit score on the backside of the pyramid it was determined in August 2019 to permit banks to categorise lending to registered NBFCs (aside from MFIs) as PSL as much as 5 per cent of a financial institution’s complete PSL, for on-lending to Agriculture/MSME/Housing until March 31, 2020. This dispensation was later prolonged as much as March 31, 2021.
An quantity of round Rs 37,000 crore has been lent by banks to NBFCs for on-lending to the required precedence sectors by December 2020.
The extension will additional facilitate NBFCs to assist the sectors which contribute considerably to the financial progress when it comes to export and employment. It is going to additionally enhance the liquidity place of such entities.
