INSUBCONTINENT EXCLUSIVE:
The reserve requirement for unlisted companies has been reduced to 10% of the outstanding debentures.India's non-banking financial firms
and listed companies that issue debentures will no longer have to maintain a certain level of redemption reserves against them, the
government said on Monday, in an effort to increase the availability of money for lending.The non-banking finance companies, also known as
shadow lenders, have been battling a credit crunch since IL-FS, or Infrastructure Leasing - Financial Services, collapsed in late 2018 amid
fraud allegations.The fall of IL-FS, a major player in the market, pushed up borrowing costs for rivals and forced them to pull back on
lending, hurting the availability of consumer loans
This has curbed consumer spending and hit sectors such as real estate and automobile that are big drivers of consumer demand.The move will
also make it cheaper for the shadow lenders and listed companies to raise funds and deepen the nation's bond market, the government said
in a statement.The companies will no longer need to maintain a 25 per cent reserve of the value of the outstanding debentures issued to the
public or placed privately, the government said.It has also reduced the reserve requirement for unlisted companies to 10 per cent of the
outstanding debentures from 25 per cent.The move will create more of a level-playing field between shadow lenders and commercial banks which
are already exempt from maintaining such reserves, the government said.Get Breaking news, live coverage, and Latest News from India and
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