Reserve Bank of India

Priority Sector Lending- Banks’ lending to NBFCs for on-lending – Extension of facility

RBI/2021-22/110
FIDD.CO.Plan.BC.No.15/04.09.01/2021-22

October 8, 2021

The Chairman/ Managing Director
Chief Executive Officer
All Scheduled Commercial Banks
(Excluding Regional Rural Banks, Small Finance Banks, Urban Co-operative Banks and Local Area Banks)

Dear Sir/Madam,

Priority Sector Lending- Banks’ lending to NBFCs for on-lending – Extension of facility

Please refer to para 22 of Master Directions (MD) on PSL dated September 04, 2020 (updated as on June 11, 2021) wherein the facility of bank lending to NBFCs (other than MFIs) for on-lending was allowed to be classified as PSL up to September 30, 2021.

NBFC in wooden block letters on indian currency

2. As announced in the ‘Statement on Developmental and Regulatory Policies’ dated October 8, 2021, the facility has been extended till March 31, 2022 keeping in view the increased traction observed in delivering credit to the underserved/unserved segments of the economy. Loans disbursed under the on-lending model will continue to be classified under Priority Sector till the date of repayment/maturity whichever is earlier. Further, bank loans to HFCs for on-lending for the purpose of housing, as prescribed in para 23 of our MD on PSL dated September 4, 2020, will continue as hitherto.

3. All other guidelines as issued vide MD on PSL ibid will continue to apply.

Yours faithfully,

(Sonali Sen Gupta)
Chief General Manager-in-Charge

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