Liquidity crisis: Banks get RBI nod to raise credit to NBFC bonds

In a move that could provide some liquidity to the cash-starved non-banking financial companies (NBFC), the RBI on Friday allowed banks to raise credit to bonds issued by the systemically important NBFCs and housing finance companies (HFCs).
 
Credit enhancements have been allowed for corporate bonds for the infrastructure sector but there weren’t many takers for this, said bond arrangers. Through such an arrangement, credit of the issue gets enhanced as banks take responsibility of a part of the issue. This enables corporates to access funds from the bond market on better terms.
 
Under RBI rules, a bank can