Economy

Government considering plan to give NBFCs more lending room, says report

Updated : January 20, 2020 08:24 AM IST

According to the report, one of the options that are being considered is a plan like the Troubled Asset Relief Program (TARP) that America put in place after the 2008 financial crisis.

The programme, if implemented, will be run by the central bank or a special purpose vehicle, the report said.

Amid growing realisation that the stress in the financial sector is one of the primary reasons behind India's economy not recovering, the government is considering options to provide support to the non-banking finance companies (NBFCs), reported The Economic Times, citing government officials.

According to the report, one of the options that are being considered is a plan like the Troubled Asset Relief Program (TARP) that America put in place after the 2008 financial crisis that was sparked by the subprime mortgage crisis. The programme, if implemented, will be run by the central bank or a special purpose vehicle, the report said.

“There have been discussions for creating a special purpose vehicle to purchase assets from these entities to give them headroom to lend,” a government official was quoted as saying in the report. The report added that such a structure will be funded by residual stakes in the Special Undertaking of Unit Trust of India (SUUTI).

“Credit is totally choked and there is a growing view that there is need for some urgent measures to support consumption,” the official told ET.

Government considering plan to give NBFCs more lending room, says report

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