TIWN
Mumbai, Oct 8 (TIWN) Reserve Bank of India (RBI) has ruled out any special liquidity facility for Non Banking Financial Institutions (NBFCs) saying there is enough in the system to meet their needs for borrowings and it is for the lenders to take a call on lending to the NBFCs.
"Reserve Bank's position is that there is adequate liquidity in the system and it is for the lenders to take a view on which borrower to give money to and I do not think at this moment we are looking at a liquidity facility for NBFCs", RBI deputy Governor N. S. Vishwanathan said in an analyst meet after the Monetary Policy Committee (MPC) meeting. He was responding to a question that in the financial markets, there is an extreme lack of confidence to lend to below AAA names and the liquidity problems faced by such entities could create further stress on financial system, impede monetary transmission and affect growth. Post a fraud at PMC, analysts wanted to know if there are any changes in the annual review process of banks or NBFCs that RBI proposes to make or any specified proposed changes and if that will be effective for ongoing annual review of financial year 2019. RBI said there will be revamp of its regulatory and supervisory structure and creating a specialized cadre for this.
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