November 25, 2020
Home  »  Website  »  Business  »  RBI Introduces Measures To Increase Liquidity Flow For NBFC Sector

RBI Introduces Measures To Increase Liquidity Flow For NBFC Sector

In September, RBI said it will ease SLR norms from October to induce liquidity into the financial system amid concerns of a credit crunch.

Google + Linkedin Whatsapp
Follow Outlook India On News
RBI Introduces Measures To Increase Liquidity Flow For NBFC Sector
File Photo
RBI Introduces Measures To Increase Liquidity Flow For NBFC Sector
outlookindia.com
2018-10-20T15:27:36+05:30

Amid concerns of credit crunch for the non-banking financial companies (NBFC) sector, the Reserve Bank of India (RBI) on Friday introduced new measures to increase the liquidity flow to NBFCs and housing finance companies(HFCs).

"It has been decided that, with immediate effect, 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 (Statutory Liquidity Ratio) requirement," RBI said in a notification on Friday.

"This will be in addition to the existing FALLCR (Facility to Avail Liquidity for Liquidity Coverage Ratio) of 13 per cent of NDTL, and limited to 0.5 per cent of the bank's NDTL (Net Demand and Time Liabilities)."

In September, RBI said it will ease SLR norms from October to induce liquidity into the financial system amid concerns of a credit crunch.

SLR is a reserve requirement that commercial banks must maintain.

As per the notification, the additional FALLCR will be available up to December 31.

"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 notification said.

(IANS)


For in-depth, objective and more importantly balanced journalism, Click here to subscribe to Outlook Magazine
Next Story >>
Google + Linkedin Whatsapp

The Latest Issue

Outlook Videos