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    NBFCs can't avail moratorium on their loans, will get liquidity via targeted LTROs

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    NBFCs can't avail moratorium on their loans, will get liquidity via targeted LTROs

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    People in the know at RBI point out that the FAQs released by the government of India and State Bank of India (SBI) on various doubts that people had on the RBI’s moratorium and working capital announcements, state clearly say that NBFCs, micro-financial institutions (MFIs) and other financial sector entries are not eligible under the scheme.

    There has been some uncertainty over the question of whether loans taken by non-banking financial companies (NBFCs) will be included in the 3-month moratorium provided by the Reserve Bank of India (RBI). CNBC-TV18 has learnt that the answer is no.
    People in the know at RBI point out that the FAQs released by the government of India and State Bank of India (SBI) on various doubts that people had on the RBI’s moratorium and working capital announcements, state clearly say that NBFCs, micro-financial institutions (MFIs) and other financial sector entries are not eligible under the scheme.
    However, the NBFCs may get liquidity from banks buying their CPs, bonds with Long Term Repo  Operation (LTRO) money as the central bank has directed banks to invest money raised from LTRO in corporate bonds and CPs.
    Sources in both the RBI and SBI said that the moratorium is intended for real economy entities and not for financial sector intermediaries. For them, it is the targeted LTRO money that will help match whatever cashflow mismatches they have.
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