{"id":5262,"date":"2021-05-18T09:37:27","date_gmt":"2021-05-18T09:37:27","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=5262"},"modified":"2021-05-18T09:39:58","modified_gmt":"2021-05-18T09:39:58","slug":"nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19\/","title":{"rendered":"NBFCs request RBI for Restructuring Loans and Fresh Liquidity Support during Covid-19"},"content":{"rendered":"\n<p class=\"has-drop-cap\">As the impact of the current wave of Covid-19 begins to play out, Non-Banking Financial Companies (NBFCs) have asked the Central Bank to permit new restructuring loans for customers and businesses undergoing stress in this pandemic. In a letter to the RBI (Reserve Bank of India, <strong><em>FIDC (Finance Industry Development Council)<\/em><\/strong>, which is a representative body of NBFCs, has also requested for liquidity support for on-lending to minor or small businesses in India. In this article, we will discuss such requests for restructuring loans and new liquidity support.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a923b54902\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a923b54902\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19\/#Why_is_it_necessary_to_make_such_requests_restructuring_loans_and_fresh_liquidity_support_to_RBI\" title=\"Why is\nit necessary to make such requests (restructuring loans and fresh liquidity\nsupport) to RBI?\">Why is\nit necessary to make such requests (restructuring loans and fresh liquidity\nsupport) to RBI?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19\/#Requests_made_by_FIDC_%E2%80%93_Restructuring_Loans_and_Fresh_Liquidity_Support\" title=\"Requests\nmade by FIDC \u2013 Restructuring Loans and Fresh Liquidity Support\">Requests\nmade by FIDC \u2013 Restructuring Loans and Fresh Liquidity Support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19\/#Fresh_Liquidity_Support\" title=\"Fresh\nLiquidity Support\">Fresh\nLiquidity Support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfcs-request-rbi-for-restructuring-loans-and-fresh-liquidity-support-during-covid-19\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_is_it_necessary_to_make_such_requests_restructuring_loans_and_fresh_liquidity_support_to_RBI\"><\/span>Why is\nit necessary to make such requests (restructuring loans and fresh liquidity\nsupport) to RBI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Recently, the second wave of Covid-19 is in peak time and possibly starts to come down in June. In this scenario, the Non-Banking Financial Companies will begin pitching under the pressure of high Non-Performing Assets (NPAs) while controlling the request of the suspension and restructuring from the present and worthy customers. Most of the borrowers are marginal farmers, shopkeepers, machine operators, shopkeepers, owners of workshops, taxi owners\/drivers, and local contractors in the <a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\"><strong>NBFC<\/strong><\/a> sector. Such borrowers are hit primarily by the state-wide and restricted lockdowns mandates in some major parts of the country, which are highly affected by this pandemic. <\/p>\n\n\n\n<p>The\nsecond wave has already commenced hurting the collection of the NBFCs. The\nlenders also require support for delivering credit to the borrowers. Hence, the\nNon-Banking Financial Companies have requested the Reserve Bank of India for\nproviding restructuring loans and offering liquidity support for advice over\nobstacles due to the second wave of the Covid-19 pandemic.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requests_made_by_FIDC_%E2%80%93_Restructuring_Loans_and_Fresh_Liquidity_Support\"><\/span>Requests\nmade by FIDC \u2013 Restructuring Loans and Fresh Liquidity Support<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>FIDC wrote, <strong><em>\u201cConsidering the difficult environment for MSMEs and lenders, it will be helpful if the Reserve Bank of India extends the restructuring regime till at least March 31, 2022\u201d<\/em><\/strong>. The Finance Industry Development Council requested to raise the overall support in the outlay of the <strong>Reserve Bank of India<\/strong><sup><a href=\"https:\/\/www.rbi.org.in\/\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup> to <strong><em>AIFIs (All Indian Financial Institutions) <\/em><\/strong>from Rs. 50,000 crores to minimum Rs. 75,000 crores. It also demands an extra Rs. 25,000 crores to be made accessible entirely to the medium &amp; small Non-Banking Financial Companies via SIDBI for three years. The present allocation for the other sectors can continue with their authorised limits.<\/p>\n\n\n\n<p>The Finance Industry Development Council demanded the Reserve Bank of India for a single time restricting loans will make sure that such small Non-Banking Financial Companies stay eligible for additional bank finance with no mismatch in their asset-liability position and hence, help them support their wholesale &amp; retail borrowers with new credit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fresh_Liquidity_Support\"><\/span>Fresh\nLiquidity Support<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nFinance Industry Development Council also requests or demands fresh liquidity\nsupport from the Government of India for on-lending to MSMEs (Micro, Small, and\nMedium Enterprises). In the rise of Covid, the Reserve Bank of India announced\nliquidity measures of Rs. 13 lakhs crore last year. <\/p>\n\n\n\n<p>The\nReserve Bank of India had announced the <strong><em>TLTRO on-tap Scheme<\/em><\/strong> on October 9,\n2020, which was available up to March 31, 2021. In addition to the 5 sectors\nannounced under the scheme on October 21, 2020, twenty-six stressed sectors\nrecognised by the <strong><em>Kamath Committee<\/em><\/strong> were brought within the scope of sectors\nliable under on-tap TLTRO on 4<sup>th<\/sup> of December, 2020 and bank lending\nto Non-Banking Financial Companies on February, 2021. <\/p>\n\n\n\n<p>Liquidity\navailed by banks under this scheme is to be placed in commercial paper,\ncorporate bonds, and non-convertible debentures granted by companies in such\nsectors; it can also be used to extend bank loans and advances to such sectors.\nThe Reserve Bank of India more extended the TLTRO on-tap Scheme by a period of\n6 months till September 30, 2021.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The FIDC announced that the RBI has been ongoing to deliver the time for on-lending advantage by six months at the review time on an impromptu basis. The FIDC (Finance Industry Development Council), in its letter, said that it would be helpful or beneficial if the Reserve Bank of India extends its August 06, 2020 notification on one-time restructuring loans till March 31, 2020.\u00a0 Hence, the Non-Banking Financial Companies have requested the Reserve Bank of India for providing restructuring loans and offering liquidity support for advice over obstacles due to the second wave of the Covid-19 pandemic.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/prior-consent-for-nbfcs-merger-amalgamation-from-rbi\/\">Prior Consent for NBFC\u2019s Merger\/Amalgamation from RBI\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As the impact of the current wave of Covid-19 begins to play out, Non-Banking Financial Companies (NBFCs) have asked the Central Bank to permit new restructuring loans for customers and businesses undergoing stress in this pandemic. In a letter to the RBI (Reserve Bank of India, FIDC (Finance Industry Development Council), which is a representative [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":5265,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[58],"tags":[649],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/5262"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=5262"}],"version-history":[{"count":15,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/5262\/revisions"}],"predecessor-version":[{"id":5279,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/5262\/revisions\/5279"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/5265"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=5262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=5262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=5262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}