NEW DELHI: Housing sector regulator National Housing Bank (NHB) is planning to infuse an additional Rs 10,000 crore capital into Housing Finance Companies (HFC) from Friday to boost their liquidity. “To further ease flow of funds to the housing sector, NHB is making available from today, a liquidity infusion facility of Rs 10,000 crore for HFCs as additional liquidity for individual housing loans, for affordable housing,” a Finance Ministry statement said, adding that this facility will be over and above the existing finance schemes of NHB.
Finance Minister Nirmala Sitharaman had announced in the Budget that the government would provide a onetime six-month partial credit guarantee to public sector banks for the “first loss of up to 10 per cent” to enable them purchase pooled assets of financially sound Non-Banking Financial Companies (NBFC) amounting to Rs 1 lakh crore. “Now…the backstop guarantee to banks for NBFC portfolios taken over by them has become effective.
Banks will be utilising this guarantee support as per the contours of the scheme,” it said. Also, subsequent to budgetary announcements, the RBI has unveiled a slew of measures for banks to avail additional liquidity of `1.34 lakh crore. “This would ease the liquidity stress in the NBFC sector and increase the access of these NBFCs to bank finance, and in turn enable them to continue to play their role in meeting the financing requirement of the productive sector of economy,” the ministry said.
The government has received a proposal from the RBI on draft modalities of the guarantee to operationalise the budget announcement. The ministry further said the Centre has accorded its approval to the modalities that would be set in motion by the RBI. “The Department of Financial Services would put in place an oversight mechanism for the scheme,” it said.
REVIEW MEETING
The Finance Minister is slated to meet chiefs of all public sector banks as well as prominent private sector
banks on Monday to discuss credit growth in key sectors of the economy.