Even as the government and the Reserve Bank of India (RBI) today announced a slew of measures to enhance liquidity into the system and strengthen the financial sector, a six-member committee on liquidity assessment and injection said it will submit an interim report next week.

The committee, headed by Finance Secretary Arun Ramanathan, spent the day meeting bankers, mutual funds, finance companies and representatives of small and medium enterprises (SMEs) to assess the liquidity requirement and look at various proposals.

Bank of India Chairman and Managing Director T S Narayansami, who is a member of the committee, said the panel was looking at indicators such as use of the liquidity adjustment facility (LAF) to understand the credit need in the system.

“We have explained the current situation and suggested that the Rs 20,000 crore that was made available at 9 per cent repo rate for 14 days should be kept out of the SLR (Statutory Liquidity Ratio) limit,” said Association of Mutual Funds in India (AMFI) Chairman A P Kurian. Describing the condition as temporary, he said that the overall situation needs to be improved.

Though only four banks used the special RBI window to access funds yesterday, Kurian expected more banks to come forward to help the mutual fund industry. Housing finance companies have recommended opening the external commercial borrowing (ECB) window, said Dewan Housing Finance Corporation Vice-Chairman and Managing Director Kapil Wadhawan.

Although NBFCs have not asked for any special window for funds, they want banks to continue lending to them. Sundaram Finance Managing Director T T Srinivasaraghavan said he wanted banks to be innovative in lending to the sector as the cash crunch was affecting SMEs.

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