Rs 40,000 crore now available to NBFCs and MFs: IBA

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Mumbai, Nov 02 (UNI) Cash strapped Non Banking Finance companies (NBFCs) can now avail the Rs 40,000 crore bank funding following the Reserve Bank of India's (RBI) reduction of Cash Reserve Ratio (CRR) and Statutory liquidity Ratio (SLR) on November 1, Indian Banks Association (IBA) CEO Dr K Ramakrishnan said here today.

Speaking to mediapersons, Mr Ramakrishnan said that IBA would like to reassure the NBFCs and Mutual Fund (MF) entities that banks would come forward to meet funding requirements ''including liquidity'' to meet redemptions in an expeditious manner.

The Association of Mutual Funds in India (AMFI) has already been intimated by IBA with focus on home loans, and the public should also be assured on the soundness of the country's financial system, Mr Ramakrishnan said.

Welcoming RBI's move, Mr Ramakrishnan said, ''Now that inflation is coming down, the RBI has taken very proactive steps giving impetus to growth. The 1.5 per cent window for banks to lend to NBFCs and MF should ease matters.'' He however said that it would take at least a week to gauge the reaction of banks on RBI's weekend announcement.

''Banks will only take recourse of facilities when there is a need and if it matches with their policies.'' Union Bank of India Chairman and Managing Director M V Nair also welcomed RBI's move and said that this was an oppurtunity for prices to come down. ''Banks who deal in small home loans upto Rs 30 lakhs will be the first to benefit. Our retail banking target is 30 per cent,'' Mr Nair said.

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