Home › Circulars › RBI/2021-2022/67

Retail & Wholesale Trade Now Eligible as MSMEs for Priority Sector Lending (via Ministry of MSME)

Current · Source: Reserve Bank of India · RBI/2021-2022/67 · issued 07 Jul 2021 · ~2 min read
Quick answerThe Ministry of MSME has expanded the MSME definition to include retail and wholesale trade under specific NIC codes for priority sector lending. Enterprises with existing Udyog Aadhaar Memorandums under these codes can migrate to the Udyam Registration Portal or file afresh, boosting credit access for traders.
The rule, in the simplest words
How it plays out — a real example

Mr. Kumar, a small retail trader in Indore, approaches the agri & priority-sector lending officer, Ms. Singh, to take a loan for his business. Ms. Singh helps Mr. Kumar to register on the Udyam Registration Portal and classify his business as an MSME under NIC code 45. With this registration, Mr. Kumar's loan is now eligible for priority sector lending, and he can access credit at a lower interest rate. An agri & priority-sector lending officer in Indore helps a small retail trader, Mr. Kumar, to register on the Udyam Registration Portal and classify his business as an MSME for priority sector lending.

What changed

Retail and wholesale trade activities under NIC codes 45, 46, and 47 are now classified as MSMEs for priority sector lending purposes. Enterprises with existing Udyog Aadhaar Memorandums under these codes can migrate to the Udyam Registration Portal or register afresh.

What it means for you

Banks can now classify loans to retail and wholesale traders as priority sector advances, helping meet lending targets. This expands the MSME credit pool and formalizes a large segment of the trading economy, but lenders must verify NIC code compliance and Udyam registration.

What you must do

Who it affects

All commercial banks including SFBs, LABs, and RRBs, Primary Urban Co-operative Banks, State Co-operative Banks, DCCBs, All-India Financial Institutions, Non-Banking Financial Companies, Retail and wholesale trade enterprises

❓ Common questions

Which NIC codes are covered under this change?

NIC codes 45 (wholesale/retail trade and repair of motor vehicles), 46 (wholesale trade except motor vehicles), and 47 (retail trade except motor vehicles) are now eligible for MSME classification for priority sector lending.

Can existing Udyog Aadhaar holders under these NIC codes migrate to Udyam?

Yes, enterprises with Udyog Aadhaar Memorandums under NIC codes 45, 46, and 47 can migrate to the Udyam Registration Portal or file a fresh registration.

Is this change permanent or temporary?

The circular states this is for the limited purpose of priority sector lending, but no end date is specified in the source. Banks should treat it as an ongoing classification until further notice.

📜 Read the original circular — full text as issued by RBI
RBI/2021-2022/67 FIDD.MSME & NFS.BC.No.13/06.02.31/2021-22 July 7, 2021 The Chairman/ Managing Director/Chief Executive Officer All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks) All Primary (Urban) Co-operative Banks/State Co-operative Banks / District Central Co-operative Banks All-India Financial Institutions All Non-Banking Financial Companies Dear Sir/Madam, New Definition of Micro, Small and Medium Enterprises - Addition of Retail and Wholesale Trade Please refer to the circulars FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 dated July 2, 2020 on ‘Credit flow to Micro, Small and Medium Enterprises Sector’ and FIDD.MSME & NFS.BC.No.4/06.02.31/2020-21 dated August 21, 2020 , on ‘New Definition of Micro, Small and Medium Enterprises- clarifications’. 2. In this connection, Ministry of Micro, Small and Medium Enterprises vide Office Memorandum (OM) No. 5/2(2)/2021-E/P & G/Policy dated July 2, 2021 , has decided to include Retail and Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they would be allowed to be registered on Udyam Registration Portal for the following NIC Codes and activities mentioned against them: 45
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-2022/67 · issued 07 Jul 2021. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forCredit Manager / UnderwritingRM — Loans (Assets)Branch Manager — PSU / Co-op / RRB (sanctioning powers)Branch Sales / CASA Acquisition OfficerLoan Operations / CPC / DisbursementCompliance Team
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Financial Inclusion & Priority Sector
Small Account Rules for Co-operative Banks – RBI Circular 2011RRB CRR Hiked to 9% from Aug 30, 2008CRR Hiked for RRBs by 50 bps in Two StagesRRBs: PMLA Compliance – CTR, STR, and KYC Software MandateRRB CRR Hiked to 8.25% from May 24, 2008
Browse all departments →
Who does what — compliance checklist
🏦 Branch Manager
  • Communicate the change to branch managers and relationship teams for customer outreach.
💻 IT / Systems
  • Update internal MSME classification systems to include NIC codes 45, 46, and 47 for priority sector lending.
📜 Compliance
  • Train credit officers to accept Udyam registrations from retail and wholesale trade enterprises.
  • Review existing loan portfolios to reclassify eligible retail/wholesale trade accounts as priority sector MSMEs.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All commercial banks including SFBs, LABs, and RRBs, Primary Urban Co-operative Banks, State Co-operative Banks, DCCBs, All-India Financial Institutions, Non-Banking Financial Companies, Retail and wholesale trade enterprises), your first concrete step on “Retail & Wholesale Trade Now Eligible as MSMEs for Priority Sector Lending (via Ministry of MSME)” is: “Update internal MSME classification systems to include NIC codes 45, 46, and 47 for priority sector lending.” (RBI issued this 07 Jul 2021).

  1. Circular: RBI/2021-2022/67 -- Retail & Wholesale Trade Now Eligible as MSMEs for Priority Sector Lending (via Ministry of MSME)
  2. Issued: 07 Jul 2021
  3. Action required: Update internal MSME classification systems to include NIC codes 45, 46, and 47 for priority sector lending.
  4. Action required: Train credit officers to accept Udyam registrations from retail and wholesale trade enterprises.
  5. Action required: Review existing loan portfolios to reclassify eligible retail/wholesale trade accounts as priority sector MSMEs.
  6. Action required: Communicate the change to branch managers and relationship teams for customer outreach.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12126&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—