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The Reserve Bank of India on Friday announced an additional liquidity facility to banks for purchase of assets from and on-lending to non-banking financial companies and housing finance companies. This will enable banks to avail additional liquidity of ₹1,34,000 crore.
This would be available within the Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) within the mandatory SLR requirement.
“It has been decided that, with immediate effect, banks will be permitted to reckon this increase in FALLCR of 1 per cent of the bank’s NDTL as Level 1 HQLA for computing LCR, to the extent of incremental outstanding credit to NBFCs and HFCs over and above the amount of credit to NBFCs/HFCs outstanding on their books as on date,” an RBI statement said.
The RBI said the move would complement the Union Budget 2019-20 announcement for improving liquidity to NBFCs.
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