RBI - FAQs on Priority Sector Lending / Bank Credit to Micro Finance Institutions (MFIs) - Priority Sector Lending

RBI issued FAQs on Priority Sector Lending - Targets and Classification on July 24, 2017 (Link). 

Bank Credit to Micro Finance Institutions (MFIs) - Priority Sector Lending

1. RBI clarified vide FAQ Point No. 10 that Bank Credit to MFIs (NBFC-MFIs, Societies, Trust etc.) extended for on-lending to Individuals and also to members of SHGs / JLGs is eligible for categorisation as priority sector advance under respective categories viz., Agriculture, Micro, Small and Medium Enterprises, Social Infrastructure and Others subject to the criteria laid down in para IX of the Master Circular FIDD.CO.Plan.BC.04/04.09.01/2015-16 dated July 1, 2015 on Priority Sector Lending- Targets and Classification. 

2. RBI further vide FAQ Point No. 5 clarifies that Bank credit to Micro Finance Institutions (MFI) extended for on-lending to individuals/ members of SHGs/ JLGs for water and sanitation facilities is also eligible for classification as priority sector loans under ‘Social Infrastructure’ subject to certain criteria.

Please refer the latest instructions on Priority Sector Lending –Targets and Classification have been issued vide RBI Circular FIDD.CO.Plan.BC.04/04.09.01/2015-16 dated July 1, 2015 (amended up to December 15, 2015). [FAQ Point No. 14]