**Summary:**
This Reserve Bank of India (RBI) circular, reference number RBI/2021-22/110 FIDD.CO.Plan.BC.No.15/04.09.01/2021-22, dated October 8, 2021, addresses the classification of bank lending to Non-Banking Financial Companies (NBFCs) for on-lending under Priority Sector Lending (PSL). Specifically, it extends the facility, as outlined in para 22 of the Master Directions (MD) on PSL dated September 4, 2020 (updated June 11, 2021), which allows banks' lending to NBFCs (excluding Microfinance Institutions) for on-lending to be classified as PSL. Originally set to expire on September 30, 2021, this facility is now extended until March 31, 2022. Loans disbursed under this on-lending model will continue to be classified under PSL until the date of repayment/maturity, whichever is earlier. Furthermore, bank loans to Housing Finance Companies (HFCs) for on-lending for housing, as described in para 23 of the aforementioned MD on PSL, will continue as before. All other guidelines issued within the MD on PSL remain in effect.
Contact information for further inquiries: Sonali Sen Gupta, Chief General Manager-in-Charge, Financial Inclusion and Development Department, Central Office, 10th Floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai – 400 001. Telephone: 91-22-22601000; Fax: 91-22-22621011 / 22610948 / 22610943; Email: cgmincfidd@rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector and monetary policy.
Priority Sector Lending: A scheme by Reserve Bank of India, requiring banks to allocate a certain portion of their lending to specified sectors of the economy.
Non-Banking Financial Companies: Financial institutions that provide banking services but do not hold a banking license.
Micro Finance Institutions: Financial institutions that provide small loans and other financial services to low-income individuals and groups.
Master Directions on PSL dated September 04, 2020: A comprehensive set of guidelines issued by the Reserve Bank of India regarding Priority Sector Lending.
Housing Finance Companies: Companies that specialize in providing loans for the purchase or construction of homes.
Mumbai, Maharashtra: City in India, location of Central Office of Reserve Bank of India
Sonali Sen Gupta: Chief General Manager-in-Charge, Financial Inclusion and Development Department, Reserve Bank of India
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
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.
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
िव�ीय समावेशन और िवकास िवभाग,क��ीय कायार्लय, 10व� मंिज़ल,क��ीय कायालर् य िब�ल्डगं ,शहीद भगत �सहं माग,र् मुंबई 400 001
टेलीफोन:Tel No.: +912222601000/ फैक्स: +91-22-22621011/22610948/22610943 ईमेल: cgmincfidd@rbi.org.in
Financial Inclusion and Development Department, Central Office,10th Flr, Central Office Building, Shahid Bhagat Singh Marg,Mumbai 400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए
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नह� करता ह।ै ऐस े�स् ताव� का �कसी भी तरीके से जवाब मत दीिजए।
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