The news is in reference to the Special Liquidity Scheme(SLS), totalling 30,000 crores, announced as a part of the Aatma Nirbhar Bharat Package to support firms facing distress and in urgent need of liquidity. The core eligibility to avail the scheme is to be registered with RBI for NBFCs and National Housing Bank for HFCs. The Indian government acts as a promoter of the scheme while the execution is handled by SBICAP.
The Scheme was launched on July 1, 2020 permitting both primary and secondary market purchases of debt and seeking to address the short term liquidity needs of NBFCs and HFCs.
As an update from the Finance Ministry, 15 proposals under the SLS scheme have been sanctioned and 37 more applications seeking financing of up to Rs 11,037 crore are under process.
Under the scheme, the government will provide an unconditional and irrevocable guarantee to the special securities issued by the Trust.
Since February 2020, liquidity measures announced by the RBI aggregated to about Rs 9.57 lakh crore, equivalent to about 4.7 per cent of the 2019-20 nominal GDP.
Both for the past and the future, Liquidity Injection has been a key tool for the Reserve Bank of India to provide relief to the companies. With the benefit of hindsight, the liquidity measures will help in significant lowering of interest costs for borrowers thereby resulting in effective transmission of lower policy rates and to repair the financial conditions.
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