02 January, 2020
4 Min Read
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Prelims and Mains focus: About the liquidity crisis in the NBFC sectors and efforts of RBI to improve the liquidity situation
News: The Reserve Bank of India (RBI) has extended by six months existing relaxations for the securitization of assets by non-banking financial companies (NBFCs).
Aim of the move
The move is aimed at providing NBFCs with some more breathing space to repair their balance sheets by selling assets and improving liquidity.
What is MHP?
The minimum holding period is the duration for which an NBFC is required to hold the loans on its book before selling them.
Efforts made by the RBI to improve liquidity in NBFCs
Non-Banking Financial Companies (NBFCs) are the financial institutions that offer banking services but do not comply with the legal definition of a bank, i.e. it does not hold a bank license.
Both banks and NBFCs are financial intermediaries. NBFCs can lend and make investments. Hence, their activities are akin to that of banks.
However, there are a few differences between NBFCs and banks:
Significance of NBFCs
Non-banking finance companies (NBFCs) are a fundamental part of the Indian financial system playing a significant role in nation-building and financial inclusion. It plays a complementary role to the banking system in promoting financial inclusion. There are multiple varieties of NBFCs and so the sector demands a well-coordinated response from all stakeholders keeping in mind the differential contextual requirements of different categories of NBFCs.
India is now ranked 38th out of 139 nations in the Logistic Performance Index (LPI) 2023 of the World Bank. From its previous rankings of 44th in 2018 and 54th in 2014, this is a notable improvement. Earlier, the Logistics Ease Across Different States (LEADS) Report 2022 was published by the Ministry of Commerce and Industry. About Logi
Airports discovered more than 63% of this illegal gold. The Department of Revenue Intelligence recently conducted the Golden Dawn Operation across India, seizing 101.7 kg of illegal gold valued at Rs 51 crore. Despite the fact that India receives a legal import of about 800-1,000 tonnes of gold each year, the illicit market is thought to be
Both parties expressed satisfaction with the ongoing bilateral defence cooperation at the 8th India-Thailand Defence Dialogue, which was held in Bangkok, Thailand. Cultural ties and mutual cooperation that have been shaped by thousands of years of lasting historical and cultural ties characterise India and Thailand relations. Highlight
The Kerala government's appeal of the order of the Kerala High Court is rejected by the Supreme Court. The Kerala government's appeal against the Kerala High Court's directive to move Arikomban (Wild Elephant), the "rice tusker" of Munnar, to the Parambikulam tiger reserve was recently dismissed by the Supreme Court.
Global Buddhist Summit In order to improve diplomatic and cultural ties with other nations, the Ministry of Culture recently organised the First Global Buddhist Summit 2023 in collaboration with the International Buddhist Confederation (IBC). About the summit "Responses to Contemporary Challenges: Philosophy to Praxis" is
Copyright© Aspire IAS Academy. All rights reserved. Powered by CLT Technologies & Edu-Publishers Private Limited.