Finance Minister Nirmala Sitharaman today announced Rs 30 thousand crore liquidity scheme for Non-Banking Financial Companies (NBFC), that are struggling with cash crunch way prior to the outbreak of the pandemic. Under the scheme, investment will be made in both primary and secondary market transactions in investment-grade debt paper of NBFCs/HFCs/MFIs.
The new announcement will help supplement the measures ensured by the Reserve Bank of India or centre to augment liquidity.
The Finance Minister announced that the securities under the scheme will be fully guaranteed by the government of India.
It will be providing liquidity support for NBFCs/ HCI/MFIs and mutual funds and create confidence in the market.
First 20 percent of the loss will be borne by Government of India, the guarantor. Besides, AA paper and below including unrated paper will be eligible for investment.
This scheme will help NBFCs, MFIs and HFCs who have low credit rating. This, in turn, will help MSMEs as more liquidity will be available to them.