NBFCs get ₹50,000-cr. liquidity booster

NBFCs get ₹50,000-cr. liquidity booster

Part of: GS Prelims and GS-III – Economy

In News:

• The Reserve Bank of India (RBI) has announced a host of measures to provide liquidity support to non-banking financial companies (NBFCs). 
• They shall receive ₹50,000 crore worth of liquidity booster. 

Key takeaways: 

• RBI has also decided to give them certain benefits for loans which are being extended to the commercial real estate sector.
• The RBI has also decided to provide special refinance facility of ₹50,000 crore to NABARD, SIDBI and NHB to enable them to meet sectoral credit needs.

Important value additions:

Reserve Bank of India 

• It is India’s central bank, which controls the issue and supply of the Indian rupee. 
• RBI is the regulator of entire Banking in India. 
• RBI plays an important part in the Development Strategy of the Government of India.
• RBI was set up in 1935 under the Reserve Bank of India Act,1934.

Non-Banking Financial Company

• It is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. 
• The most important difference between non-banking financial companies and banks is that NBFCs don’t take demand deposits. 

National Bank for Agriculture and Rural Development (NABARD)

• It is an Apex Development Financial Institution in India.
• It deals with matters concerning Policy Planning and Operations in the field of credit for Agriculture and other Economic activities in Rural areas in India. 
• It is active in developing Financial Inclusion policy.
• It was established on the recommendations of B.Sivaramman Committee, on 12 July 1982. 

Small industrial Development Bank of India (SIDBI)

• It is a development financial institution in India. 
• It serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. 
• It was established on April 2, 1990, through an Act of Parliament. 
• It is headquartered in Lucknow.
• It operates under the Department of Financial Services, Government of India.

National Housing Bank (NHB)

• It is a Government of India owned entity.
• It was set up on 9 July 1988 under the National Housing Bank Act, 1987. 
• It is an apex financial institution for housing.