Begin typing your search above and press return to search.

RBI Eases Norms to Increase Liquidity Flow for NBFC Sector

RBI Eases Norms to Increase Liquidity Flow for NBFC Sector

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  20 Oct 2018 9:07 AM GMT

Mumbai: The Reserve Bank of India (RBI) on Friday came out with new measures to increase the liquidity flow to non-banking financial companies (NBFCs) and housing finance companies (HFCs). The move comes amid concerns of a credit crunch for the NBFC sector post default by some of the IL&FS Group companies.

“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. (IANS)

Next Story