Aims to facilitate banks to lend to NBFCs and HFCsThe Reserve Bank of India (RBI) has decided to extend the liquidity benefits provided to the banks till 31 March 2019, in order to further facilitate banks to lend to NBFCs and HFCs.
The banks have been permitted to reckon government securities as Level 1 HQLA under FALLCR within the mandatory SLR requirement upto 0.5% of the bank's NDTL in respect of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility was available up to 31 December 2018, which is now extended to 31 March 2019.
Further, the single borrower limit for NBFCs (not financing infrastructure) has been increased from 10% to 15% of capital funds till 31 December 2018, now extended to 31 March 2019.
It may be noted that with effect from 11 April 2019, banks exposures to a single NBFC shall be restricted to 15% of their eligible capital base (Tier-1 capital).
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