RBI announces more steps to increase credit flow to NBFCs


Team Udayavani, Oct 19, 2018, 1:02 PM IST

Mumbai: The Reserve Bank on Friday announced more measures to increase liquidity flows to the non-banking financial companies.

The RBI permitted banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements.

The move will help provide liquidity to housing finance companies (HFCs) and non-banking finance companies (NBFCs) which have come under pressure following a series of default by IL&FS group companies.

“Banks will be permitted to also reckon Government securities held by them up to an amount equal to their incremental outstanding credit to NBFCs and HFCs, over and above the amount of credit to NBFCs and HFCs outstanding on their books as on October 19, 2018, as Level 1 HQLA under FALLCR within the mandatory SLR requirement,” RBI said in a notification.

This will be in addition to the existing FALLCR of 13 per cent of total deposits and limited to 0.5 per cent of the bank’s total deposits.

Liquidity coverage ratio refers to highly liquid assets that financial institutions need to hold in order to meet short-term obligations.

The additional window will be available up to December 31, 2018, the notification said.

Besides, it said, the single borrower exposure limit for NBFCs which do not finance infrastructure stands increased from 10 per cent to 15 per cent of capital funds, up to December 31, 2018.

The RBI has been taking a series of steps to infuse liquidity in the system. It has also been undertaking open market operation at regular intervals to add liquidity.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Accused cannot be convicted on ground of suspicion: SC

Rupee falls 37 paise to close at 79.62 against US dollar

India to be fastest growing economy this yr: Govt source

Man who assaulted, robbed woman arrested by Kundapur Rural Police

KMF employee is ‘public servant’, can be tried under Prevention of Corruption Act: HC

100 mn doses of Corbevax supplied to Centre: Biological E Ltd

Stringent action against hospitals avoiding admission of Covid patients: Min Dr. Sudhakar


Related Articles More

Rupee falls 37 paise to close at 79.62 against US dollar

India to be fastest growing economy this yr: Govt source

RBI cancels the licence of Pune’s Rupee Co-operative Bank

Sensex rallies 580 over pts in early trade; Nifty tops 17,650

Elon Musk sells $7B in Tesla shares ahead of Twitter fight

MUST WATCH

Kerala: A man in Malappuram protested against potholes on roads in a unique way by bathing & performing yoga in a water

NEWS BULLETIN AUGUST 11

Chikkamagaluru SP Akshay Felicitation

NEWS BULLETIN 10-08-2022

ADGP Alok kumar Statement about Pravin Nettaru case


Latest Additions

Accused cannot be convicted on ground of suspicion: SC

Rupee falls 37 paise to close at 79.62 against US dollar

India to be fastest growing economy this yr: Govt source

Man who assaulted, robbed woman arrested by Kundapur Rural Police

KMF employee is ‘public servant’, can be tried under Prevention of Corruption Act: HC

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.