RBI extends dates for classification of bank credit to focused NBFCs

RBI has extended dates for the classification of bank credit to focused NBFCs as priority sector lending till March 31, 2022.

The provision ended on September 30 and a need was felt for extending the facility with a view to increase the credit flow to certain priority sectors of the economy which contribute significantly to growth and employment.

Bank lending to registered NBFCs (other than MFIs) for on lending to Agriculture (investment credit), Micro and Small enterprises and housing (with an increased limit) was permitted to be classified as priority sector lending up to certain limits in August 2019, which was last extended on April 7, 2021 and was valid up to September 30, 2021.

Considering the increased traction observed in delivering credit to the underserved/unserved segments of the economy, it has been decided to extend this facility till March 31, 2022. A circular in this regard will be issued shortly, RBI said in a statement.