Money & Banking

Special Liquidity Scheme for NBFCs/HFCs: FinMin sanctions 5 proposals for ₹3,090 crore

Our Bureau New Delhi | Updated on July 24, 2020

The Ministry of Finance.   -  The Hindu

35 more applications seeking financing up to ₹13,775 crore are under process

The Finance Ministry on Friday said that five proposals involving an amount of ₹3,090 crore had been sanctioned under the ₹30,000 crore Special Liquidity Scheme for NBFCs and HFCs.

Also, 35 more applications seeking financing up to ₹13,775 crore are under process in this scheme, which was announced as part of the Aatma Nirbhar package announced by the Finance Minister Nirmala Sitharaman on May 13, an official release said.

The scheme has been launched to improve the liquidity position of NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks to the financial sector.

The scheme is being implemented by SLS Trust, the SPV set up by SBI Capital Markets Limited (SBICAP). Any NBFC including Microfinance Institutions registered with RBI under the Reserve Bank of India Act, 1934 (excluding those registered as Core Investment Companies) and any HFC registered with the National Housing Bank (NHB) under the National Housing Bank Act, 1987 which is complying with certain specified conditions are eligible to raise funding from this facility.

The scheme will remain open for three months for making subscriptions by the Trust. The Scheme permits both primary and secondary market purchases of debt and seeks to address the short-term liquidity issues of NBFCs/HFCs. Therefore, those market participants who are looking to exit their standard investments with a residual maturity of 90 days may also approach the SLS Trust, the release added.

Published on July 24, 2020

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