INSUBCONTINENT EXCLUSIVE:
Mumbai: The central bank is set to allow high-street lenders and non-banking finance companies (NBFCs) to jointly originate priority sector
policies during its third bimonthly monetary policy
Priority sector is defined by loans to agriculture, micro and small enterprises (MSME), housing, education loans and loans to weaker
Banks have to compulsorily lend 40% of their net bank credit to this sector
Total priority sector loans stood at 24.97 trillion, up 6.3% year-on-year, according to the latest RBI statistics.
So far, banks that could
not meet this target used to buy securities from NBFCs
used to work together but perhaps the RBI wants to set a proper process
recovery of such smallticket loans
