Coronavirus Outbreak: RBI governor Shaktikanta Das meets NBFCs, MFs sector; reviews liquidity situation

Operations of NBFCs have commenced from Monday as the government eased restrictions for the lockdown.

Press Trust of India May 04, 2020 20:06:43 IST
Coronavirus Outbreak: RBI governor Shaktikanta Das meets NBFCs, MFs sector; reviews liquidity situation

Mumbai: Reserve Bank governor Shaktikanta Das on Monday reviewed liquidity position and ways to promote lending to the MSME sector during a meeting with representatives of non-banking financial companies and mutual funds amid the lockdown induced by the COVID-19 pandemic.

Sectoral meetings, held separately in two sessions through video conference, were also attended by deputy governors and other senior officers of RBI, the central bank said in a statement.

Operations of NBFCs have commenced from Monday as the government eased restrictions for the lockdown.

Coronavirus Outbreak RBI governor Shaktikanta Das meets NBFCs MFs sector reviews liquidity situation

File image of Shaktikanta Das. PIB

Some of the issues discussed during the meeting included availability of liquidity from banks and other financial institutions and post-lockdown strategies for supply of credit, including working capital, to MSMEs, traders and bottom of pyramid customers in semi-urban, rural and urban areas, the RBI said.

Implementation of three months moratorium on repayment of loan instalments announced by the RBI; and strengthening grievance redressal mechanisms were also discussed.

With regard to meeting with the mutual funds industry, the impact of measures taken by the Reserve Bank with regard to the provision of liquidity was discussed.

Days after Franklin Templeton Asset Management Company announced closure of six of its debt fund schemes, the Reserve Bank of India (RBI) had announced a special liquidity facility of Rs 50,000 crore for the mutual fund industry to avert spread of contagion.

However, the first tranche of Rs 25,000 crore auction under the widow got tepid response as banks subscribed only 50 per cent of this.

Besides, it said review of the functioning of the bond markets and plans for the way forward were also deliberated.

The governor acknowledged the critical role of NBFCs, including micro finance institutions (MFIs), in delivering last mile credit, and the importance of mutual funds in financial intermediation, RBI said in the statement.

The RBI governor on Saturday had met heads of public sector and private sector banks asking them to step up their lending towards the MSME sector.

The meeting reviewed the economic situation and implementation of various measures announced by it to reduce stress in the financial system amid the COVID-19 crisis.

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