Economy
Stressed NBFCs, HFCs given Rs. 3,090 Crores Rs 14,000 crore under process
M Y Team
As on July 23, five proposals involving an amount of Rs 3,090 crore have been duly sanctioned to 5 stressed non-banking financial companies and housing finance companies. Further, 35 more applications have been received seeking financing up to Rs 13,776 crore, which are under process. This is the current status of the Rs. 30 Thousand crore special liquidity scheme as per the statement issued by the Finance Ministry. The scheme was launched on July 1 for stressed NBFCs and HFCs whose financial health deteriorated further due to the Covid-19 crisis.
The Reserve Bank of India has provided funds via government guaranteed special securities issued by a trust set up by SBI Capital Markets Ltd. The scheme is being implemented by SLS Trust, the special purpose vehicle set up by SBICAP.
Any NBFC including microfinance institutions registered with RBI under the Reserve Bank of India Act, 1934 (excluding those registered as core investment firms) and any HFC registered with the National Housing Bank under the National Housing Bank Act, 1987, complying with certain specified conditions are eligible to raise funding from this facility. This special scheme will remain open for three months. The scheme permits both primary and secondary market purchases of debt and seeks to address the short term liquidity issues of non-banking financial companies/housing finance companies, it said. The instruments will be commercial papers and non-convertible debentures with a residual maturity of not more than three months and rated as investment grade. Therefore, it said, those market participants who are looking to exit their standard investments with a residual maturity of 90 days may also approach the SLS Trust.
Non-banking financial companies (NBFCs) and housing finance companies (HFCs) have came under stress following a series of defaults by IL&FS group firms in September 2018. This situation further deteriorated after the lockdown announced due to Covid 19 pandemic. Shri Modi announced Atmanirbhar Economic Package to revive the economy from Covid 19 effect and this Rs 30 thousand Crore package was part of it.
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