Major NBFCs May Not Get RBI Deferral

Sidhartha and Mayur Shetty | TNN

Mumbai/New Delhi: The country's top countries that are actively monitored for having around Rs 65 billion rupees of debt maturing in three months and may not get any relief through loans.

While some microfinance institutions (MFIs) and NBFCs have been pressing aggressively with the RBI and the government to extend the installation of the moratorium, official sources in the Capital said, the regulator has analyzed the business of the main NBFCs and is closely monitoring 100, and concluded that most are not facing a cash crisis today. A sample survey of MFIs has shown that there are no major mismatches. The RBI is conducting further analysis in this segment.

“The RBI maintains close tabs in both segments and if necessary in the future, it will take action. We don't think something is immediately justified, a government official said. As part of a special package for Covid-19, the RBI has allowed a loan moratorium for corporate and retail borrowers, but the Association of Banks of India has excluded financial companies.

According to a bank CEO, a general aid package for NBFC is not guaranteed because banks are already supporting them and those who now face liquidity problems have governance problems. Since October 2018, there have been initiatives to help NBFCs deal with their liquidity problems, and only entities that have been unable to raise money face problems, the bank chief said. In addition to banks, NBFCs have to pay non-banks, who are not offering them a moratorium.

However, industry players said there are some large players involved and that any adverse impact on them could destabilize the entire financial sector.

The RBI has announced a refinancing support of Rs 1-lakh-crore for banks that invest in NBFC debt and companies through a long-term repos operation (TLTRO). Half of this is reserved for fresh debt and will help top-rated NBFCs raise funds from banks. In a memo, the IIC lobby group has sought priority for NBFCs at LTRO auctions and demanded a dedicated minimum allocation of Rs 1 lakh crore for the segment during the first quarter. Alternatively, it has asked the government to guarantee the fundraising by the NBFCs or for the RBI to buy their papers. In addition, it has demanded an increase in the partial guarantee from Rs 5 crore to Rs 30 crore.

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