NEW DELHI: The Union Cabinet on Wednesday took several decisions, including clearing an amendment to the insolvency law, approving a Partial Credit Guarantee Scheme to help Non Banking Finance Companies, and infusing `5,300 crore in India Infrastructure Finance Company Limited (IIFCL).
These moves had been announced by the government earlier.
The Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings for offences committed by the previous promoters of a company. This will remove “certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business,” an official statement said.
The Cabinet has also given approval to the Partial Credit Guarantee Scheme. The proposed Government Guarantee support and resultant pool buyouts will help NBFCs/HFCs resolve their temporary liquidity or cash flow mismatch issues, and enable them to continue contributing to credit creation and providing last-mile lending to borrowers.The `5,300 crore capital will be infused into IIFCL through recapitalisation bonds in the current fiscal year. Another `10,000 crore will be infused in 2020-21.