RBI Governor to discuss liquidity with NBFCs tomorrow

NEW DELHI: RBI Governor Shaktikanta Das on Monday said he will be meeting NBFCs in Mumbai on Tuesday to get a grasp on the prevailing liquidity issues.

The central bank meet with MSME associations to determine their current conditions and impact of the debt restructuring scheme.

Das said the apex bank is constantly monitoring liquidity situation, adding that it would take more steps, if need be.


The Governor clarified that the RBI does not want a situation where liquidity becomes "loose money". Caution and care have to be exercised by the RBI for excess liquidity, he said.

On the recent restructuring scheme, Das noted that MSME bodies spoke about functional issues.

“Banks are tasked with examining the viability aspect and monitoring of restructured loans of MSMEs,” he said.

MSMEs account for nearly 25 per cent of commercial lending in India as of 2017-18.

The RBI recently allowed banks and NBFCs to undertake a one-time loan restructuring exercise of MSME borrowers, who are stressed but yet to be classified as non-performing loans (NPLs). As per the process, the restructuring is to be completed by March 31, 2020, and lenders would have to make a provision of 5 per cent on restructured loans and provide disclosures of the same in the notes to accounts.

“NPAs and health of the banking sector is our top focus. Improvements on the NPA front has to be sustained,” he said.

Das, meanwhile, also indicated that he would meet representatives of cooperative banks separately. The RBI is also looking at governance reforms for public sector banks.

On the interim dividend to the government, the Governor said the central bank is examining a report from the Standing Committee on Finance. "Lots of discussions take place with the government. The RBI won’t be delaying information once the decision is taken," he added.