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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Priority Sector Lending (PSL) - On-lending by Small Finance Banks (SFBs) to NBFC-MFIs

05-May-2021 | RBI/2021-2022/27 FIDD.CO.Plan.BC.No.10/04.09.01/2021-22

RBI has decided to allow PSL classification to the fresh credit extended by SFBs to registered NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognized Self-Regulatory Organisation of the sector and which have a gross loan portfolio of upto Rs. 500 crore as on 31 March 2021, for the purpose of on-lending to individuals. Bank credit as above will be permitted up to 10% of the bank's total priority sector portfolio as on 31 March 2021. The above dispensation shall be valid upto March 31, 2022. However, loans thus disbursed will continue to be classified under Priority Sector till the date of repayment/maturity whichever is earlier. Further, banks will be required to adhere to the conditions prescribed for on-lending under para 21 of our Master Directions on PSL dated September 4, 2020 (updated as on April 29, 2021)

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