New Delhi, March 5 -- The National Bank for Financing Infrastructure and Development (NaBFID) has approached the Reserve Bank of India (RBI) to increase the exposure limit under the partial credit enhancement (PCE) facility to 50 per cent of the bond issue size, sources revealed.

Current norms restrict financial institutions from providing credit enhancement beyond 20 per cent of the bond size.

Discussions between RBI and NaBFID on this proposal have been ongoing, with no major objections from the banking regulator, a source stated.

Finance Minister Nirmala Sitharaman, in her last Budget speech, announced NaBFID's plan to establish a PCE facility for corporate bonds in the infrastructure sector.

The primary objective is to improve the...