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RBI extends support to AIFIs in the time of crisis

The Reserve Bank of India is now focussing on achieving the funding needs of NBFCs, MFIs and housing finance by giving special refinance facilities of Rs 50,000 crore to All India Financial Institutions (AIFIs) such as the NABARD and the SIDBI.

Announcing a series of liquidity and regulatory steps for ensuring the continuity of economic activity during the COVID-19 outbreak and lockdown, RBI Governor Shaktikanta Das shared on April 17 that advances under the refinancing route would be charged at repo rate at the time of availment.

He said that refinancing window for AIFIs would help offset effect of tightening of financial conditions in the wake of the COVID-19 pandemic that has made raising funds problematic for these institutions.

As per RBI decision, Rs 25,000 crore would be offered to National Bank for Agriculture and Rural Development (NABARD) for refinancing regional rural banks (RRBs), cooperative banks and micro finance institutions (MFIs); Rs 15,000 crore to Small Industries Development Bank of India (SIDBI) for on-lending/refinancing; and Rs 10,000 crore to National Housing Bank for supporting housing finance companies (HFCs).

The AIFIs play an important role in meeting the long-term funding requirements of agriculture and the rural sector, small industries, housing finance companies, NBFCs and MFIs. These are the segments where funding needs is felt the most during the current crisis.

Editorial Desk at Agrigate.Global

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