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Punjab & Sind Bank Application Forms

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RBI EXCLUDES HFCs loans from priority sector

Posted by admin On December - 19 - 2009 ADD COMMENTS

The Reserve Bank of India declared that short-term loans given by banks to housing finance companies (HFCs) for further lending to end borrowers will not be included in  priority sector lending.

Therefore RBI said that “Banks should note that if the tenor of such loans granted by them to HFCs is not co-terminus with the onlending of HFCs, they will not be eligible for classification under priority sector lending,”

As per apex bank , Since the housing loans are generally medium to long term taken by individuals, short-term loans with tenor of six months to one year granted by banks to HFCs for onlending purposes would not be same as the loans taken by the individuals.

(BS)

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