New Delhi, Oct 9 (IANS) The State Bank of India (SBI)'s decision to buy Rs 45,000 crore worth asset portfolios from non-banking financial companies (NBFC) will provide them the much-needed liquidity, a top Finance Ministry official said on Tuesday.
"SBI today stepped up substantially a facility for purchasing portfolio of assets from NBFCs to provide liquidity to NBFCs. SBI would buy such portfolios up to a total amount of Rs 45,000 crore. This measure should alleviate liquidity concerns to a great extent," Economic Affairs Secrtary Subhash Chandra Garg tweeted.
The country's largest lender, which had initially planned for a growth of Rs 15,000 crore through portfolio purchase during the current year, on Tuesday announced that it may buy additional portfolio in the range of Rs 20,000 crore to Rs 30,000 crore.
India's NBFC sector has been hit by trust deficit after the Infrastructure Leasing and Financial Services (IL&FS) Ltd, a major infrastructure financing and construction firm, defaulted on its debt obligations leading to constrained liquidity for non-bank lenders.
The bank's decision to expand its loan portfolio comes a day after housing finance regulator National Housing Bank (NHB) raised its refinance limit to Rs 30,000 crore from Rs 24,000 crore to make more funds available to housing finance companies.
Refinancing is a credit flow to housing finance companies and other institutions. The NHB is the principal agency to promote housing finance institutions in the country and to provide financial support to eligible institutions.
