Central Bank has exhausted cap on exposure to NBFCs: Pallav Mohapatra

Central Bank of India on Friday said it has exhausted the exposure cap on NBFCs after the Centre asked lenders to provide them with funding support, an official said.

The assistance to NBFCs by banks are a part of the stimulus package announced by the central government in view of the Covid-19 crisis.

"We have financed the NBFCs and exhausted the exposure cap for the sector," MD & CEO of Central Bank Pallav Mohapatra said.

Speaking at a webinar organised by MCCI, he said the bank will review enhancing the cap so that more funds can be extended to NBFCs, after assessing their asset-liability management.

Mohapatra also cautioned those borrowers who have surplus cash, but are still availing of the moratorium allowed by the RBI, of interest burden.

"Deferral of interest is justified for those who do not have cash. But for those who have surplus cash, interest burden will compound when repayments start," he said.

Mohapatra said Central Bank had linked lending rates to repo rates for quick transmission, benefitting the borrowers.