Banks can co-orig­i­nate loans with NBFCs

India Business Journal - - NEWS ROUND-UP -

The RBI has per­mit­ted all sched­uled com­mer­cial banks to coo­rig­i­nate loans with non­bank­ing financial com­pa­nies (NBFCs) for cre­at­ing el­i­gi­ble pri­or­ity sec­tor as­sets. The central bank, how­ever, has ex­cluded re­gional ru­ral banks (RRBs) and small fi­nance banks (SFBs) from coo­rig­i­na­tion as most of the loans they orig­i­nate are pri­or­ity sec­tor loans. The RBI has said that guide­lines on co-orig­i­na­tion of pri­or­ity sec­tor loans will be is­sued by the end of Septem­ber.

Pri­or­ity sec­tor loans in­clude loans given to agriculture, MSMEs, ex­port credit, education, hous­ing, so­cial in­fra­struc­ture, and re­new­able en­ergy, among others.

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