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Stressed NBFCs, HFCs seek about Rs 10,000-cr financing support under special liquidity scheme

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New Delhi: The finance ministry on Sunday said financing requests of close to Rs 10,000 crore have been received under the special liquidity scheme worth Rs 30,000 crore for stressed NBFCs and HFCs whose financials further deteriorated due to the COVID-19 crisis.

The scheme was launched on July 1. The Reserve Bank of India (RBI) has provided funds for the scheme by subscribing to government-guaranteed special securities issued by a trust set up by SBI Capital Markets Limited (SBICAP).

“RBI has also issued a circular to NBFCs and HFCs on July 1, 2020 itself on the Scheme. SBICAP has received 24 applications requesting about Rs 9,875 crore of financing as on July 7, 2020 which are being processed,” the finance ministry said in a statement.

The first application has been approved and the remaining are also under consideration, it said.

The Investment Committee of Special Liquidity Scheme (SLS) Trust has approved investment of up to Rs 200 crore in commercial paper issued by the applicant.

Non-banking financial companies (NBFCs) and housing finance companies (HFCs) came under stress following a series of defaults by IL&FS group firms in September 2018.

During the latest review of the Atmanirbhar Bharat package by Finance Minister Nirmala Sitharaman, progress of various schemes was discussed, including the Rs 3 lakh crore credit guarantee scheme for the MSME sector hit hard by the COVID-19 pandemic.

Banks have sanctioned loans of about Rs 1,20,099 crore under the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, the statement said.

However, disbursements against this stood at Rs 61,987.90 crore till July 9 under the 100 per cent ECLGS for micro, small and medium enterprises (MSMEs).

Besides, front-loaded special refinance facility of Rs 30,000 crore has been sanctioned by NABARD during COVID-19 to Regional Rural Banks (RRBs) and cooperative banks.

This special facility will benefit 3 crore farmers, consisting mostly small and marginal farmers in meeting their credit needs for post-harvest and kharif sowing requirements, it said.

With kharif sowing already on in full swing, Rs 24,876.87 crore out of the Rs 30,000 crore has been disbursed as on July 6, it added.

With regard to the Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs, it said banks have approved purchase of portfolio of Rs 14,000 crore and are in process of approval/negotiations for Rs 6,000 crore as on July 3, 2020.

On the taxation front, Rs 50,000 crore liquidity infusion has been made through TDS/TCS rate reduction by 25 per cent for transactions made from May 14  to March 31, 2021.

Between April 8 and June 30, the Central Board of Direct Taxes (CBDT) has issued refunds in more than 20.44 lakh cases amounting to more than Rs 62,361 crore, while remaining refunds are under process.

It has already been communicated that making payment without additional amount under the ‘Vivad se Vishwas’ Scheme will be extended to December 31, 2020, it said. The legislative amendments for the same in the Vivad Se Vishwas Act, 2020 shall be moved in due course to time.

Meanwhile, the Ministry of Corporate Affairs has raised the threshold of default under the IBC, 2016 to Rs 1 crore from Rs 1 lakh earlier. The ministry is finalising a special insolvency resolution under section 240A of the Insolvency and Bankruptcy Code (IBC) to provide relief to the MSMEs.

To support the state governments hit by revenue losses due to the lockdown, the Department of Expenditure has issued a communication to all the states for additional borrowing of 2 per cent of projected GSDP in 2020-21, subject to implementation of specific state level reforms.

To promote the MSME sector, global tenders have been disallowed in government procurement up to Rs 200 crore, it added.

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