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TMI BlogFinancial support to private banks and NBFCsX X X X Extracts X X X X X X X X Extracts X X X X ..... Financial support to private banks and NBFCs X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of ₹ 10,000 crore in India Infrastructure Finance Company Limited (IIFCL) and ₹ 200 crore in Industrial Finance Corporation of India Limited (IFCIL) is part of the Union Budget proposals for the financial year 2020-21. Shri Thakur further enumerated a number of steps that have been taken to increase credit flow, including, inter-alia, the following: * Bank credit to Non-Banking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Companies (NBFCs) other than Micro-Finance Institution NBFCs for on-lending has been made eligible for classification as priority sector up to a limit of five percent of individual bank's total priority sector lending and up to ₹ 10 lakh per borrower for agriculture and up to ₹ 20 lakh per borrower for micro and small enterprises and for housing. * Scheduled commercial ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks other than Regional Rural Banks and Small Finance Banks have been allowed to engage with Non-deposit Taking Systemically Important NBFCs to co-originate loans for creation of priority sector assets. * National Housing Bank (NHB) has launched a Liquidity Infusion Facility (LIFt) for refinance to Housing Finance Companies (HFCs) for financing affordable housing sales. * Partial Credit Guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Scheme has been launched for providing guarantee to Public Sector Banks (PSBs) for purchasing pooled assets rated BBB+ or higher from financially sound NBFCs/HFCs. * To address working capital needs of Micro, Small and Medium Enterprises (MSMEs), PSBs are offering up to 25% enhancement in the existing working capital limits in standard MSME accounts as a Standby Line of Credit. * Trade Rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivables electronic Discounting System (TReDS) has been introduced to address cash flow problems faced by MSMEs due to delayed payments, and till 24.1.2020, 6.22 lakh trade receivable bills/invoices amounting to ₹ 15,095 crore, have been discounted on TReDS. * RBI has permitted one-time restructuring of existing loans to MSME accounts that were in default but classified as standard as on 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2019 and continue to be classified as standard as on the date of implementation of restructuring. * Single-borrower exposure limit for NBFCs (excluding gold loan companies) has been increased from 15% to 20% of tier-I capital of the bank. * Risk weights as per credit agency assigned ratings have been made applicable to bank exposures to NBFCs other than Core Investment Companies. * Risk we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight on consumer loans (excluding credit card receivables) has been reduced from 125% to 100%. * To enable creation of requisite headroom for borrowing, equity support has been provided to IIFCL, enabling it to finance big-ticket infrastructure projects. * Capital has been infused in Exim Bank Limited to enable it to support export and import finance. * Banks have been allowed to issue long- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term bonds for financing infrastructure and affordable housing loans. * Debts due to the lenders in case of public-private partnership projects are allowed to be considered as secured to the extent assured by the project authority in terms of the concession agreement. * In case of availability of escrow accounts in respect of infrastructure lending, unsecured infrastructure loan accounts class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified as sub-standard attract 20% provisioning as against 25% provisioning applicable for other unsecured sub-standard accounts. * Banks have been permitted to lend to Infrastructure Investment Trusts (InvITs), subject to certain safeguards. * Considering the complexities involved in large-scale projects, relaxation has been given for retaining standard asset classification, where the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencement of commercial operations is extended beyond the original date.
Giving more details, Shri Thakur said that standby credit facility to fund cost overruns, up to a maximum of 10% of the original project cost in addition to the 'interest during construction' that may arise on account of delay in completion, has been introduced in respect of project finance. X X X X Extracts X X X X X X X X Extracts X X X X ..... B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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