Govt approves scheme to improve liquidity position of NBFCs, says RBI

Under the scheme, eligible non-bank lenders will be provided short-term liquidity through a special purpose vehicle set up by the SBICAP securities

The government has approved a scheme under which the eligible non-bank lenders will be provided short-term liquidity through a special purpose vehicle (SPV) set up by the SBICAP securities, a subsidiary of the State Bank of India, the RBI said on Wednesday.

Under the special liquidity scheme, the SPV will purchase the short-term papers from eligible non-banking financial companies (NBFCs)/housing finance companies (HFCs), which will utilise the proceeds under this scheme solely for the purpose of extinguishing existing liabilities.

"The Government of India has approved a scheme to improve the liquidity position of NBFCs/HFCs through a SPV to avoid any potential systemic