The Reserve Bank of India (RBI) today extended till September 30 a facility, announced in the second stimulus package early this year, to provide liquidity support of Rs 20,000 crore to non-deposit taking NBFCs.
"The facility of providing liquidity support to non-deposit taking but systematically important non-banking financial companies is now extended for any paper issued by NBFCs up to September 30, 2009," the central bank said in a release.
In order to provide liquidity to NBFCs to meet the temporary fund mismatches, RBI in January offered to purchase securities issued by a special purpose vehicle guaranteed by the government for an aggregate amount of Rs 20,000 crore till June 30.
The Industrial Development Bank of India Stressed Asset Stabilisation Fund Trust was notified as the SPV for this.
The scheme was finalised for providing liquidity support to non deposit taking systematically important NBFCs.
The SPV was to directly purchase the short-term paper, such as, commercial papers and non-convertible debentures, having a maturity of 90 days, from the issuing NBFCs.
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