New RBI window for NBFCs unlikely to improve their credit: Report
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The partial credit enhancement (PCE)facility by the Reserve Bank of India's (RBI) for non-bank lenders is unlikely to have the desired impact of increasing credit flow to the troubled sector, a report said Friday. On November 2, RBI had allowed banks toNew RBI window for NBFCs unlikely to improve their credit: Report
The partial credit enhancement (PCE)facility by the Reserve Bank of India's (RBI) for non-bank lenders is unlikely to have the desired impact of increasing credit flow to the troubled sector, a report said Friday. On November 2, RBI had allowed banks to provide PCE for debt raised by non-deposit-taking systematically important non-banking financial companies (NBFCs) and housing finance companies (HFCs). «The issuance volumes for NBFCs/HFCs under the PCE framework are likely to remain muted,» domestic rating agency Icra said in the note. Credit enhancement is a tool typically aimed at improving credit worthiness of a borrower, in this case the NBFCs. The RBI move came amid a strong pitch for many, including its central board members, to increase the credit supply to the troubled sector. NBFCs and HFCs are facing a crisis of confidence following the default by IL&FS since late-August, which led to its takeover by the government last month. This in turn led to a ... Read more