SBI says there is no liquidity crisis, NBFCs are meeting commitments

Ahead of the Reserve Bank of India’s board meeting on Monday, State Bank of India chairman Rajnish Kumar on Thursday said there was “no liquidity crisis” and that NBFCs are meeting their commitments as far as rollovers are concerned.

“All of them have been able to rollover and meet their commitments,” Kumar said on the sidelines of an event here.

Banks, including Nabard, are supporting NBFCs. Nabard has `15,000-crore exposure to NBFCs, which is small compared to its loan assets size of `4.80 lakh crore, Bhanwala said. So far, there has been no default on Nabard loans to NBFCs.

The IL&FS debt crisis in late September had a spillover impact, which hurt the liquidity position of other NBFCs, leading to a roil in markets for weeks.

The finance ministry will be seeking immediate solutions to the issues of MSME credit and NBFC liquidity in the central bank’s board meeting on November 19, official sources said on Wednesday. The sources said the government’s priority at this juncture is to boost credit flows to small and medium enterprises (SMEs) and NBFCs.

In the forthcoming board meeting, being held for the second time in two months, the finance ministry and the RBI might also try to reach an mutually-agreeable solution on the former’s proposal to relax the Prompt Corrective Action (PCA) framework for weak banks so that their immediate lending capacity gets a boost.

State Bank of India