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Blended lending in priority sector – the new scheme of Bank-NBFC participation

October 29, 2018[2018] 98 437 (Article)
Meeting priority sector lending (PSL)targets has have always been a challenge for several commercial banks, particularly those not with a strong retail branch network, given the fact that PSLs are most small-ticket loans and involve costly origination and specialized recovery procedures. NBFCs, specifically MFIs, operating on low-cost origination structures and having greater retail accessibility and outreach, have always been feeders to banks for their PSL shortfalls.
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