RBI Released Draft Liquidity Norms for NBFCs

  • On 25th May, 2019, the Reserve Bank of India (RBI) released a draft circular titled-Liquidity Risk Management Framework for NBFCs and Core Investment Companies (CICs).
  • RBI after analysing recent developments in NBFC sector proposed a set of guidelines for large Non-Banking Financial Companies (NBFCs) to help them deal with severe liquidity problems and to prevent re-occurrence of IL&FS type of debt crisis.

Reasons for Draft Guidelines

  • Rising Cases of Default: Ever since 2018, when IL&FS crisis erupted banks have been averse to lending for this sector, which has further put NBFCs in a tight spot. There are rising concerns that NBFCs ....
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