Smt. Nirmala Sitharaman, Union Minister for Finance & Corporate Affairs had announced and launched a Special Liquidity Scheme of Rs. 30,000 crore on 13th March, 2020 with a view to improving the liquidity position of NBFCs as well as HFCs.
- RBI will provide funds for the Scheme by subscribing to government guaranteed special securities issued by the Trust.
- The total amount of such securities issued outstanding shall not exceed Rs. 30,000 crores at any point of time.
- Government of India will provide an unconditional and irrevocable guarantee to the special securities issued by the Trust.
- The Scheme is being launched on July 1, 2020 through a Special Purpose Vehicle in the form of SLS Trust set up by SBI Capital Markets Limited (SBICAP).
Who can take the benefit:
|NBFC including Microfinance Institutions registered with RBI under the Reserve Bank of India Act, 1934 (excluding those registered as Core Investment Companies)||any HFC registered with the National Housing Bank (NHB) under the National Housing Bank Act, 1987|
Following Conditions required to be complied to get eligible to raise funding from the said facility:
- Compliance with RBI regulations on Capital adequacy
- Net NPA is less than 6% as on 31.03.2019
- Net profit in at least one of the two preceding financial years
- Rated as investment grade by a rating agency
- Is not reported under SMA-1 or SMA-2 category by any bank for their borrowing during the period one year prior to 01.08.2018
Launched on July 1, 2020 and The Scheme will remain open for 3 months for making subscriptions by the Trust.
Period of Lending
(CPs/NCDs of NBFCs/HFCs for short duration of upto 90 days) by the Trust shall be for a period of upto 90 days.
Use of the funds
- The financing would be used by the NFBCs/HFCs only to repay existing liabilities and not to expand assets.
- Further, those market participants who are looking to exit their standard investments with a residual maturity of 90 days may also approach the SLS Trust.
About this scheme
- This facility is a part of the Government of India and RBI’s efforts
- To alleviate the concerns of the market participants on the availability of funds to the sector.
- To avail liquidity under the Scheme can apply at [email protected]
- Details of the Scheme can be viewed on the website of SBI Capital Markets.
RBI Circular on the Special Liquidity Scheme for NBFCS/HFCs
Link of the press release:
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