To review ARC in panel works, priority sector rules to stay up to 6 months
To mitigate the impact of the epidemic and help in economic revival, RBI said that it would extend new support of India 50,000 crore to All India Financial Institutions for grant of new loans in FY 2012.
Accordingly, NABARD will be provided with a special liquidity facility (SLF) of ₹ 25,000 crore for one year to support agriculture and allied activities, rural non-agricultural sector and non-banking financial companies — micro finance institutions.
An SLF of F 10,000 crore will be extended for one year to the National Housing Bank to support the housing sector. 15,000 crore will be provided under this facility to SIDBI for funding Micro, Small and Medium Enterprises (MSMEs). All three facilities will be available at the prevailing policy repo rate.
Pointing out the importance of Asset Reconstruction Companies (ARCs) to deal with bad debts, RBI said it would set up a committee to comprehensively review the work of ARCS in the financial sector ecosystem and cater to such entities Recommend appropriate measures for Increasing requirements of the financial sector.
It stated that as ARCs had grown in number and size, their ability to resolve stressed assets had not yet been fully realized.
Approve extension of six months up to September 30 for Priority Sector Lending (PSL) classification for lending to NBFCs by banks for ‘on-lending’ for sectors that contribute significantly to the economy in terms of exports and employment Has been given.
This will provide an impetus to the loan granting NBFC at the bottom of the pyramid.
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