INSUBCONTINENT EXCLUSIVE:
Kolkata: Small and midsize non-banking finance companies (NBFCs) including microfinance firms are desperately looking to draw the unused
sanctioned loan limit from banks since the Reserve Bank of India's liquidity window may help meet only a part of their requirements, people
tracking the sector said.
They are seeking the unused sanctioned limits even though they have not fully disbursed the funds lying with them
The fact that banks are barred from investing in firms with below investment grade papers is also not helping a swathe of small NBFCs
Odisha-based micro lender Annapurna Finance
may be close to Rs 2 lakh crore, Emkay Global Financial Services said in a note
The RBI on April 17 announced a new Rs 50,000 crore liquidity tap for them through targeted long-term repo operations with a direction to
The fact is, banks are increasingly risk-averse and prefer to restrict their lending to higher-rated entities only, which defeats the
and medium NBFCs so that they honour their liabilities.
Banks are divided over providing moratorium to non-bank lenders.
State Bank of India
is against it but is reportedly exploring possibilities to create a separate loan corpus for them.
Foreign banks and some public-sector
lenders are extending the moratorium benefit to NBFCs but some private banks are not.
"With banks continuing to abstain from providing the
necessary liquidity to NBFCs (especially mid/small NBFCs), the RBI would require to infuse further liquidity at regular intervals in order
liquidity support.
Outstanding bank credit to NBFCs was Rs 7.04 lakh crore at the end of February, which was about 7.8% of overall bank
for NBFCs will be under stress." Shial said.
The home ministry has allowed NBFCs including housing finance companies and micro lenders to