The classification benefit was to be available till March 31.This is part of steps to provide support for financial sector entities to deal with slowdown and aftermath of COVID-19.Further, existing loans disbursed under the on-lending model will continue to be classified under priority sector till the date of repayment/maturity, RBI said in communication to banks.
The credit to NBFCs, other than micro-finance
institutions and housing finance
companies, for on-lending will be allowed up to an overall limit of five percent of bank’s total priority sector lending.Further, banks
will compute the eligible portfolio under on-lending mechanism by averaging across four quarters, to determine adherence to the prescribed cap.