Budget announces measures to improve liquidity of NBFCs
Recognising the current liquidity troubles in the financial sector, Finance Minister Nirmala Sitharaman in the Union Budget 2019-20 has announced a slew of measures to improve funding to the sector and ensure better regulation and governance.
In her maiden Budget speech on Friday, the FM also announced that the regulation of housing finance companies will also return to the Reserve Bank of India (RBI) from the National Housing Bank. The RBI will also have deeper regulation of NBFCs. The exact proposal is in the Finance Bill, 2018.
She has also announced a Rs 70,000 crore of capital infusion for public sector banks, which will help improve lending.
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Underlining the important role of NBFCs in providing credit in the economy, she said that fundamentally sound NBFCs should continue to get funds from banks and mutual funds. Accordingly, “for purchase of high rated pooled assets of sound NBFCS of Rs 1 lakh crore govt will provide one time six month partial credit guarantee to PSBs for first loss upto 10 per cent,” she announced in the Budget.
Source: The Hindu BusinessLine
