5 proposals under NBFCs, HFCs liquidity scheme get Rs 3,090 cr

The special liquidity scheme for NBFCs and HFCs has received a positive response from the financial sector, with five proposals, involving an amount of Rs 3,090 crore, having already being sanctioned till July 23. The Rs 30,000 crore liquidity window for NBFCs and HFCs is being implemented from July 1 as a follow up of one of the announcements under Aatmanirbhar Bharat package made by Union Finance and Corporate Affairs Minister Nirmala Sitharaman on May 13.

The scheme has been launched to improve the liquidity position of NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks to the financial sector.

"The scheme has received a very positive response. As on 23rd July, 2020, five (5) proposals involving an amount of Rs 3,090 crore have already been sanctioned. Further, 35 more applications have been received seeking financing upto Rs 13,776 crore, which are under process," a Finance Ministry statement said.

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The Scheme is being implemented by the SLS Trust, the SPV set up by SBI Capital Markets Ltd (SBICAP). Any NBFC, including Micro Finance Institutions registered with the RBI excluding those registered as Core Investment Companies and any HFC registered with the National Housing Bank (NHB) which is complying with certain specified conditions are eligible to raise funding from this facility.

The scheme, which will remain open for three months for making subscriptions by the Trust, permits both primary and secondary market purchases of debt and seeks to address the short-term liquidity issues of NBFCs/HFCs. Therefore, those market participants who are looking to exit their standard investments with a residual maturity of 90 days can also approach the SLS Trust.