The Finance Industry Development Council, a representative body of assets and loan financing NBFCs, has written to the Reserve Bank of India, requesting it to provide liquidity support for these units as they continue to face challenges in raising funds. In a letter addressed to RBI Governor Shaktikanta Das, Mahesh Thakkar, Director General, FIDC, said the announcements made on 5 May have addressed liquidity needs of small microfinance institutions MFIs, but NBFCs have been missed out. The letter pointed out that liquidity for smaller NBFCs (asset size up to Rs 500 crore) has continued to be a challenge, despite various measures taken by RBI in the past and pointed out that the liquidity situation for these NBFCs would be further aggravated since they have to restructure loans given by them, without any support on their liability side. The letter also said the only source of borrowing for small NBFCs is term loans from banks and financial institutions like SIDBI and NABARD. These players do not access the capital market or issue bonds/debentures. It pointed out that RBI had announced several rounds of targeted long-term repo operations (TLTRO) with the view to increasing credit flow from banks to NBFCs. But TLTRO has not proved successful in providing adequate bank credit to small and medium NBFCs and there is a need for a specialised window to be created for them, it said. The letter urged RBI to increase the overall support outlay to AIFIs from Rs 50,000 crore to at least Rs 75,000 crore and the additional Rs 25,000 crore may be made available exclusively to medium and smaller NBFCs, through SIDBI for 3 years. This, it said, will help smaller NBFCs in maintaining their asset-liability match as their assets typically are for 3 to 5 years. FIDC has also requested RBI to consider NABARD extending Refinance Policy for Schematic Lending under Special Liquidity Facility for all small NBFCs for their agri-loans.
