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Assocham hails RBI's opening of banking tap to boost capital flow to NBFCs

The provision will allow banks to free up Rs 500-600 billion of liquidity which banks can lend to NBFCs till December 31

Reserve Bank of India | File Photo
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Reserve Bank of India | File Photo

Press Trust of India New Delhi
Industry body Assocham Saturday hailed the Reserve Bank's decision to incentivise banks to enhance their lending to non-banking finance companies (NBFCs), saying the step will help them in tackling liquidity crunch.

The RBI on Friday allowed the banks to use government securities equivalent to their incremental credit to non-banking financial companies (NBFCs) for a three-month period to meet their liquidity coverage ratio (LCR) requirements.

The provision will allow banks to free up Rs 500-600 billion of liquidity which banks can lend to NBFCs till December 31.

"This shall also send a message that the recent developments do not indicate any

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