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Top NBFCs may not get RBI reprieve

MUMBAI/NEW DELHI: The country’s top NBFCs that are actively monitored by the RBI have around Rs 65,000 crore of bank debt maturing in three months and may not get any reprieve via a moratorium on loans.

While some NBFCs and microfinance institutions (MFIs) have been aggressively lobbying with the RBI and the government on extending the moratorium facility from banks, official sources in the Capital said, the regulator had analysed the business of the top NBFCs, and is closely monitoring the top 100, and concluded that most are not facing a cash crunch at present. A sample survey of MFIs has shown there are no major mismatches. The RBI is undertaking a deeper analysis in this segment.

“The RBI is keeping close tabs on both segments and if there is a need in future then it will take steps. We don’t think anything is immediately warranted,” said a government official. As part of a special package for Covid-19, the RBI has allowed a loan moratorium for corporate and retail borrowers, but the Indian Banks’ Association has excluded finance companies.

According to a bank CEO, a blanket relief package for NBFCs is not warranted because banks are already supporting them and the ones that are now facing liquidity problems are having governance issues. “Since October 2018, there have been initiatives to help NBFCs deal with their liquidity issues and it is only those entities which have not been able to get any money that are facing problems,” the bank chief said. Besides banks, NBFCs have to repay non-bank lenders, who are not offering them a moratorium.

Industry players, however, said there are some large players involved and any adverse impact on them could destabilise the entire financial sector.

The RBI has announced a Rs 1-lakh-crore refinance support for banks that invest in the debt of NBFCs and corporates through a targeted long-term repo operation (TLTRO). Half of this is reserved for fresh debt and will help better-rated NBFCs raise funds from banks.

In a memorandum, lobby group CII has sought priority for NBFCs in the LTRO auctions and demanded a minimum dedicated allocation of Rs 1 lakh crore for the segment during the first quarter. Alternatively, it has asked the government to guarantee fund-raising by NBFCs or get the RBI to buy their papers. Further, it has demanded an increase in the partial guarantee from Rs 5 crore to Rs 30 crore.

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