The Finance Ministry said on Wednesday that public sector banks (PSBs) have approved purchase of bonds/commercial papers worth ₹14,667 crore from 67 NBFCs under the extended Partial Credit Guarantee Scheme 2.0, which was rolled out as part of the ₹20-lakh crore Aatma Nirbhar Package.

Of this ₹14,667 crore, as much as ₹6,845 crore is for bonds below AA, providing liquidity support to NBFCs with lower rated Bonds/CPs, the Finance Minister’s Office tweeted.

As for region-wise break up of Bond/CPs issued by 67 NBFCs, the Southern region accounted for the maximum at ₹5,710 crore (23 NBFCs); followed by Western Region at ₹4,540 crore (29 NBFCs); Northern Region at ₹3,060 crore (12 NBFCs) and Eastern & North Eastern region at ₹1,357 crore (3 NBFCs).

The tweet also said that the purchase of ₹6,125 crore of Bonds/ Commercial Papers rated below AA is currently under various stages of approval/at negotiation stage.

It may be recalled that the Government had, as part of the Aatma Nirbhar Package, revamped and extended the existing Partial Credit Guarantee Scheme (PCGS) to cover the borrowings of lower rated NBFCs, HFCs and other micro finance institutions (MFIs). Under the ₹45,000-crore PCGS 2.0, the Government will provide 20 per cent first loss sovereign guarantee to PSBs for purchase of bonds or commercial papers with a rating of AA and below (including unrated paper) issued by NBFCs/HFCs or MFIs.

While the original PCGS supported transfer of assets from NBFCs/HFCs to PSBs, the extended scheme addresses temporary liquidity/ cash flow mismatches of otherwise solvent NBFCs/HFCs/MFIs without having to resort to distress sale of their assets to meet their commitments.

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