RBI offers banks additional Rs 1.34 lakh crore liquidity against G-secsholding for lending to NBFCs
Updated : July 05, 2019 07:02 PM IST
The move will release an additional liquidity worth Rs 1.34 trillion to banks, which can be used for on-lending to shawdow banking companies, which have been fund-starved since last September after industry major IL&FS went bankrupt.
Banks generally hold much more than the mandated 19 percent SLR (statutory liquidity ratio) by holding more government securities which on average is around 23 percent for the system.
The central bank also decided to frontload the facility for liquidity coverage ratio which see it increasing by 0.5 percent each in August and December 2019.