RBI announces special liquidity scheme for NBFCs and HFCs through SPV
Red Book
Red Book

Interview Guidance Program (IGP) for UPSC CSE 2024, Registrations Open Click Here to know more and registration

News: Reserve Bank of India(RBI) has operationalised the Rs 30,000 crore special liquidity scheme for non-banking finance companies (NBFCs) and Housing finance companies(HFCs). 

Facts:

  • Aim: To improve the liquidity position of non-banking finance companies (NBFCs) and housing finance companies(HFCs).
  • Under the scheme, a Special Purpose Vehicle (SPV) has been set up to manage a Stressed Asset Fund (SAF) of the NBFCs/ HFCs.
  • The SPV will issue securities which would be guaranteed by the Government of India and purchased by the Reserve Bank of India (RBI) only.
  • The proceeds of sale of such securities would be used by the SPV to acquire short-term debt of NBFCs/HFCs.
  • The Scheme will be administered by the Department of Financial Services (Ministry of Finance).

Eligibility Conditions for NBFCs/HFCs to avail this scheme:

  • All investment grade RBI-registered NBFCs excluding Core Investment Companies(CICs) and NHB-registered HFCs are eligible.
  • Capital adequacy ratio(CAR) of NBFCs/HFCs should not be below the regulatory minimum, i.e 15% and 12% respectively as on March 31, 2019.
  • Net non-performing assets should not be more than 6% as on March 31, 2019.
  • They should have made profits in at least one of the last two financial years.
  • They should not have been reported under SMA-1 or SMA-2 category by any bank for their borrowings during the last one year prior to August 1, 2018

Discover more from Free UPSC IAS Preparation Syllabus and Materials For Aspirants

Subscribe to get the latest posts sent to your email.

Print Friendly and PDF
Blog
Academy
Community