Liquidity taps opened for banks and NBFCs
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India, Aug. 24 -- The Centre will front-load its Rs.70,000-crore capital infusion into public sector banks to nudge additional lending of Rs 5 trillion, said finance minister Nirmala Sitharaman. Typically, capital infusions are staggered over a period of time.
In FY19, the government had infused more than Rs1 trillion in public sector banks. The last tranche of Rs48,239 crore in February had allowed six lenders to exit the Reserve Bank of India's (RBI's) prompt corrective action (PCA) scheme. The central bank uses the PCA framework to ring-fence lenders breaching regulatory thresholds in bad loans and capital adequacy.
The government also announced measures to support non-banking financial companies (NBFCs) and housing finance companies...
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