 "Liquidity management tool: RBI may have to balance old norms with the new")
The Union Budget will partially guarantee high-quality pooled assets of non-banking financial companies (NBFCs) and the Reserve Bank of India (RBI) has opened an indirect liquidity window for the sector to aid banks to give funds to the sector, which is on the verge of collapse.
NBFCs play “an extremely important role in sustaining consumption demand as well as capital formation in small and medium industrial segment”, Finance Minister Nirmala Sitharaman said in her maiden Budget speech.
Therefore, NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds, she said.
The FM proposed the government encourage public sector
