Contact Your Financial Adviser Money Making MC
27
November 2018
 |
RBI
(The Total Investment & Insurance Solutions)
As the government and the RBI continue to
debate over credit crunch in the economy, the central bank has come out with
the data showing that the credit growth to the real economy has shown a healthy
growth. In a release, the central bank said that the loans and advances by
NBFCs clocked growth of 17.9 per cent for the quarter ended June 2018 and 20.1
per cent for the quarter ended September 2018 YoY. Government has repeatedly
asked the central bank to do more to spur the growth of liquidity in the
economy even as the NBFC sector struggles to cope with the crisis in
infrastructure NSE 1.55 % lender IL&FS.
The RBI took a number of steps to ease the
liquidity concerns of NBFCs but the government feels that more is required. RBI
had reduced the minimum average maturity requirement for infrastructure sector
ECBs to three years from five and halved the average maturity requirement for
mandatory hedging to five years. It had earlier allowed banks to provide
partial credit enhancement (PCE) to bonds issued by the systemically important,
nondeposit-taking NBFCs. The measures are aimed at helping these two sectors
raise funds more easily.
On liquidity, the government argues
implementation of Basel III capital norms for banks, which are lower than the
norms prescribed by the central bank. The government is expected to raise the
issue of easing of liquidity with the RBI in its next board meeting in December.The Total Investment & Insurance
Solutions
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