RBI's Covid relief: SFB loans to MFIs get priority sector status

Special liquidity for SFBs to help low-income groups, say experts

To soften the blow of the second pandemic on low-income groups, the Reserve Bank of India (RBI) will provide Rs 10,000 crore for three years at the repo rate to small finance banks (SFBs) to lend individuals, small and medium enterprises (SMEs), etc.
 
The RBI incentivised SFBs to lend microfinance institutions (MFIs) by granting priority sector lending status to such exposures.
 
Credit will be up to 10 per cent of a bank’s priority-sector portfolio as of March 31, 2021. While the facility is there until March 31, 2022, loans disbursed will continue to be classified as priority-sector lending