New Delhi: The Reserve Bank of India allowed Real Estate developers upto one more year to start repayment of loan avail from Non-Banking financial companies RBI Governor Shashikanth Das on Friday said that allowing developers to extend the official date of completion also benefits NBFCs as they can restructure loans without having to classify the borrowers as defaulters.

Three weeks after RBI unveiled its first package on March 27, for an economy hitted by the Covid-19 pandemic. The RBI on Friday sought to ensure the solvency of business and small norm bank lender during the extended lockdown period by making available funds to NBFCs.

The RBI governor said that, it also increased the ability of NBFCs to lend by providing liquidity through the refinance route from SIDBI Rs. 15,000 Cr and National Housing Bank Rs. 10,000 Cr. He also announced Rs. 50,000 Cr funding exclusively to banks who lend to NBFCs through a targeted long term REPO operations @ 4.4%. To avail this, banks must invest this in bonds, commercial papers and non convertible debentures of NBFCs.

Half of these funds have to be invested according to RBI’s direction 10% in debt issued by micro finance institutions. 15% in NBFCs with asset size of Rs. 500 cr and 25% in NBFCs with assets between Rs. 500 cr and Rs. 5000 cr. On Friday the RBI allowed finance company to relax norms for commercial real estate projects to facilitate their competition. He also pointed out of that the earlier round off liquidity provided through special REPOs were used by banks to fund public sector entity and large corporates.

In addition to the Rs. 50,000 cr to finance companies, RBI set aside another Rs. 50,000 cr for farm lending, SME lending and housing finance. This is routed through a special refinance facility of Rs. 25,000 cr for NABARD, Rs. 50,000 cr for SIDBI and Rs. 10,000 cr for National Housing Bank. He also asked bank to skip dividend for FY 20 and use the money to make up for any bad loan.

RBI governor also acknowledgment for that bank were avoiding lending by parking close to Rs. 6.9 lakh cr with the Reserve Bank of India under its reverse REPO program where banks are allowed to park surplus funds to discourage banks from doing so, RBI has cut the reverse REPO rate by 25 basis point to 3.75 % from 4%.