NBFC yields yet to show contraction in spreads after govt measures

Experts believe spreads will contract as the credit lines start getting utilised, and banks regain confidence about NBFC papers for the long term

The government’s credit line and guarantee measures for non-banking financial companies (NBFCs) have not immediately resulted in a meaningful contraction in spreads in the corporate bond market, data shows.
 

Experts, however, are of the opinion that spreads will contract as the credit lines start to get utilised, and banks regain confidence about NBFC papers for the long term, armed with the partial credit guarantee.
 

On Thursday, Finance Minister Nirmala Sitharaman announced a special liquidity scheme of Rs 30,000 crore for NBFCs, housing finance companies (HFCs) and microfinance institutions (MFIs). All the investments made under this scheme will be guaranteed by