A customer waits to deposit Indian 100 rupee banknotes at a counter (Photographer: Dhiraj Singh/Bloomberg)

RBI Extends Enhanced Borrowing Limit For NBFCs Till March 31

The Reserve Bank of India Friday extended the enhanced single borrower limit facility for non-bank lenders by another three months to provide the much-needed liquidity support.

The regulator had increased the single borrower limit for non-banking financial services companies from 10 percent to 15 percent of capital funds earlier in October. This facility was valid till Dec. 31, 2018.

“In order to further facilitate banks to lend to NBFCs and HFCs (housing finance companies) as indicated above, it has been decided to extend the aforesaid facilities up to March 31, 2019," the RBI said in a notification.

As a result, a bank can give loans to the extent of 15 percent of its capital fund to a particular non-banking finance company or Housing Finance Company.

The move will help provide liquidity to NBFCs, which have come under pressure following series of default by IL&FS group companies.

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