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Credit to priority sectors as well as small and medium industries will be discussed to find ways to accelerate economic growth.
The National Housing Bank has decided to infuse an additional Rs 10,000 crore into housing finance companies to improve liquidity in the sector.
The move would enable the companies to provide individual loans for affordable housing, the finance ministry said on Friday.
Also, Finance Minister Nirmala Sitharaman will meet heads of State-owned and private banks on Monday, to discuss the ongoing liquidity crisis in non-banking finance companies and slowdown in sectors such as automobile.
Credit to priority sectors as well as small and medium industries will be discussed to find ways to accelerate economic growth.
The finance ministry made these announcements at a media briefing on Friday. Senior officials, who addressed the media, did not take questions.
“To further ease flow of funds to the housing sector, the NHB is making available from today, a liquidity infusion facility of Rs 10,000 crore for housing finance companies as additional liquidity for individual housing loans, for affordable housing. This facility will be over and above the two existing refinance schemes of NHB,” according to the statement read out by the officials.
Besides three finance ministry additional secretaries -- Sameer Kumar Khare, C S Mohapatra and Pankaj Jain -- Chief Economic Advisor Krishnamurthy Subramanian also came to brief the media. But the CEA left soon after.
The finance ministry, from next week, will hold meetings with various departments to come up with solutions to boost the micro, small and medium enterprises (MSME) sector, officials said.
Meetings will be held with ministries of MSME, electronics and information technology, rural development, health and family welfare, corporate affairs and commerce, among others.
The basis of these meetings will be the recommendations of the U K Sinha committee, an expert panel on the MSME sector which submitted its report in June.
“The committee has made over a hundred far reaching recommendations. These encompass various domains such as credit, equity funding, technology, delayed payments, need for legislative changes, rural enterprises, setting up of specific funds by the government, etc,” the statement said.
The officials also pointed out that following the Budget announcement of State-owned banks being provided partial credit guarantee by the Centre, in order to buy high-rated assets of NBFCs, the government has received a proposal from the Reserve Bank of India on the draft modalities to operationalise the scheme.
“The government has accorded its approval to the modalities that would be set in motion by the RBI,” they said.
In her Budget speech on July 5, Sitharaman had said that “NBFCs that are fundamentally sound should continue to get funding from banks and mutual funds without being unduly risk averse. For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rs 1 lakh crore during the current financial year, government will provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10 per cent.”
