The government has activated two Budget proposals laid out to provide relief to the Non-Banking Finance Companies (NBFCs).
The National Housing Bank Act has been amended to bring housing finance companies (HFCs) under the Reserve Bank of India’s (RBI) ambit, according to a CNBC-TV18 report.
Among the other proposals, the implementation of the partial credit guarantee scheme to public sector banks (PSBs) for buying high-rated pool assets of financially sound NBFCs is now operational.
Also, banks can now classify the credit provided to NBFCs (for example, HFCs) for on-lending as priority sector lending.
In the Union Budget for FY 2019-20, the Finance Minister announced that RBI will get greater powers to regulate Non-Banking Finance Companies (NBFCs). The financial crisis in India started with banks and then moved to non-banks and has now engulfed housing finance companies (HFCs) as well.
Source: moneycontrol.com