In views of Covid pandemic Reserve Bank of India (RBI) has decided to allow Priority Sector Lending (PSL) classification to the fresh credit extend.
Accordingly, Small Finance Banks (SFBs) are now permitted to regard fresh on-lending to Micro Finance Institutions (MFIs) with asset size up to Rs 500 crore as PSL.
Further, banks credit as above will be permitted up to 10 percent of the bank’s total PSL as on 31st March, 2021.
However, this facility will be available till 31st March, 2022.
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