Question : RBI has recently announced co-lending scheme for banks and NBFCs to priority sector. What are the different categories under priority sector ?
(1) Agriculture,Export Credit
(2) Micro, Small and Medium Enterprises and Renewable Energy
(3)Education,Housing and Social Infrastructure
Answer according to above mentioned codes
(a) (1) only
(b) (2) only
(c) (3) only
(d)All above
Answer (d)
Related facts
- RBI has recently(November 2020) announced co-lending scheme for banks and NBFCs to priority sector.
- This scheme is actually a number of guidelines to improve the flow of credit to the underserved sections of the economy.
- Guidelines are under the co-origination model so that NBFCs and banks can jointly lend(risks and rewards are shared).
Important points of guidelines
- In terms of the Co-Lending Model, banks are permitted to co-lend with all registered NBFCs (including HFCs) based on a prior agreement.
- NBFCs shall be required to retain a minimum of 20 per cent share of the individual loans on their books.
- Banks shall not be allowed to enter into co-lending arrangement with an NBFC belonging to the promoter Group.
- The banks can claim priority sector status in respect of their share of credit while engaging in the Co-Lending Model adhering to the specified conditions.
- The Co-Lending Model shall not be applicable to foreign banks (including WOS) with less than 20 branches.
Priority sector
Different categories under priority sector
- Priority Sector includes the following categories:
(i) Agriculture
(ii) Micro, Small and Medium Enterprises
(iii) Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others
By — Pankaj Pandey.
Link:
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11991&Mode=0
https://www.financialexpress.com/industry/banking-finance/rbi-announces-co-lending-scheme-for-banks-nbfcs/2121928/