NBFC companies relax when the Ministry of Home Affair issued an order with non-banking financial companies including microfinance institutions (NBFC-MFIs), housing finance companies, and cooperative credit societies from the financial sector. This movement took place under the critical situation of extended lockdown till May 3.
Due to the announcement made by India Prime Minister Narendra Modi regarding the extension of COVID-19 pandemic till May 3, the financial institutions in all states and union territories are issued the revised guidelines for 2.0 lockdown.
The move comes after NBFCs and MFIs constantly approaching the government to be start working in banks. During Phase 1 of the lockdown, the financial sector witnessed a fall including industrial goods and services.
Shaktikanta Das, Governor of Reserve Bank made an announcement of the important measures to support the economy amid COVID-19 pandemic lockdown.
Nifty Financial Services figured to over 5 percent at close on April 17 with M&M Financial Services, Cholamandalam Investment, and Indiabulls Housing Finance escalating to 10-17 percent followed by Shriram Transport Finance, HDFC, PFC, Bajaj Finserv, and REC.
Targeted Long term repo operations worth Rs 50,000 crore and will be conducted to initiate with the appropriate sizes. Shaktikanta Das states that on the basis of assessment, the RBI is expected to increase the size of the TLTRO. The funds availed by banks are invested in investment-grade bonds companies. These funds should go to small NBFCs and MFIs.
He further added that banks are maintaining higher provision at standstill. This can be even adjusted for actual slippages. These repo rates remain unchanged.