To help mitigate the impact of the pandemic and aid economic revival, the RBI said it would extend fresh support of ₹50,000 crore to the All India Financial Institutions for new lending in FY22.
Accordingly, NABARD will be provided a special liquidity facility (SLF) of ₹25,000 crore for one year to support agriculture and allied activities, the rural non-farm sector and non-banking financial companies-micro finance institutions, the RBI said.
An SLF of ₹10,000 crore will be extended to the National Housing Bank for one year to support the housing sector. SIDBI will be provided ₹15,000 crore under this facility for up to one year for funding of micro, small and medium enterprises (MSMEs). All three facilities will be available at the prevailing policy repo rate.
Signalling the importance of Asset Reconstruction Companies (ARCs) to deal with bad loans, the RBI said it would constitute a committee to undertake a comprehensive review of the working of ARCs in the financial sector ecosystem and recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector.
It said while ARCs had grown in number and size, their potential for resolving stressed assets was yet to be realised fully.
A six-month extension to September 30 for Priority Sector Lending (PSL) classification for lending by banks to NBFCs for ‘on-lending’ to sectors that contribute significantly to the economy in terms of export and employment — has been approved.
This would provide an impetus to NBFCs providing credit at the bottom of the pyramid.
