NBFCs to get special refinance till June 30

The Reserve Bank of India and the government have decided to extend the special refinance window available to non-banking finance companies that do not accept public deposits by three months to June 30.

The window operated through IDBI Bank’s Stressed Asset Stabilisation Fund (SASF), these finance companies are permitted to raise up to Rs 20,000 crore against certificates of deposits and non-convertible debentures.

Given the interest rate of 12.5 per cent and the window available for a short duration of up to September 30, NBFCs have been reluctant to raise resources through the route. So far, only Cholamandalam DBS has raised Rs 750 crore to meet asset-liability mismatches. The finance companies are barred from accessing capital through the window to meet their business expansion needs.

While sources indicated that so far, there was no decision to widen the ambit of the facility, NBFCs said that unless their concerns were addressed, they would stay away.

“If we access the window we will have to deal with further asset-liability liability mismatches in the months ahead. So, only companies which have no other option to raise funds, will approach SASF,” said an NBFC head.