INSUBCONTINENT EXCLUSIVE:
Mumbai: The Reserve Bank of India (RBI) has extended to end-March the relaxation offered to banks for providing liquidity support to NBFCs
equal to their outstanding credit to non-bank lenders- NBFCs and home financiers - over and above their outstanding credit to them as on
October 19, to be used to meet liquidity coverage ratio (LCR) requirements.
LCR pertains to highly liquid assets that banks and financial
institutions hold to meet their short-term obligations.
The RBI had relaxed these norms to help NBFCs get liquidity support from banks
The NBFC sector had faced a short-term fund crisis in September, which also impacted system level liquidity in subsequent months.
Under the
Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR), the banks were allowed to reckon government securities as liquid assets
October 19.
Also, the single borrower limit for NBFCs (not financing infrastructure) has been increased to 15% from 10% of capital funds
