Credit Guarantee Scheme Invoked For Loans Worth Rs 9,155 Crore, Says Finance Ministry
The scheme allows public sector banks to purchase loan assets from NBFCs and housing financiers.
Securitised loan pools worth nearly Rs 9,155 crore have been invoked under the partial credit guarantee scheme, the finance ministry said.
Between September 2018 and September 2019, banks bought around Rs 93,018 crore worth of loan assets from non-bank lenders and housing financiers, the ministry said in a statement today.
Of this, nearly 10 percent of the total loan pool has been notified under the government’s credit guarantee, the ministry said, with proposals worth an additional Rs 33,200 crore in the pipeline.
The scheme—launched last month with an outlay of Rs 1 lakh crore—allows public sector banks to purchase loan assets from NBFCs and housing financiers against which the government would provide a one-time six-month credit guarantee for losses incurred up to 10 percent of the pooled value.
Finance Minister Nirmala Sitharaman told reporters today that the matter of enhancing liquidity for NBFCs was discussed with senior bankers of state-run lenders.
“We did review as to actually what has happened in terms of liquidity moving from banks to NBFCs and from NBFCs to the customers who need the money. That took a lot of our discussion time,” she said. “Banks have identified such NBFCs whom they can straight away lend (to). Some of that has already started happening, while some are in the pipeline.”
She also announced a public outreach programme that would be conducted by banks and NBFCs across 200 districts till Sept. 29, in a bid to boost credit disbursement by lenders and also provide greater access to credit for retail customers.
Following the announcement of the co-origination lending model, state-run banks have entered into 14 tie-ups with NBFCs, with another 36 tie-ups in the pipeline, according to the statement. “This will help borrowers in terms of better access to affordable credit, while yielding business benefits to both banks and NBFCs.”
Further, with the Reserve Bank of India mandating that from Oct.1 banks would have to link their lending rates to an external benchmark, around 15 state-run lenders have already introduce repo-rate-linked products, with the remaining three state-run banks to follow soon.
“Already, over 1.08 lakh repo-linked proposals, amounting to over Rs 40,000 crore, has been sanctioned,” the ministry said.