The Union Cabinet today approved a liquidity facility for non-banking finance companies (NBFC) through a subsidiary of state-run lender IDBI. Through this arrangement, the Reserve Bank of India (RBI) will provide up to Rs 25,000 crore to NBFCs through IDBI.
For this purpose, Stressed Assets Stabilization Fund, set up for the purpose of acquiring the stressed assets of IDBI, would function as a special purpose vehicle (SPV).
“The SPV would issue government guaranteed securities as per requirement, subject to a total amount of securities outstanding not exceeding Rs 20,000 crore with an additional Rs 5,000 crore, if needed,” a government release said.