Mumbai, Apr 23 () Small Industries Development Bank of India (Sidbi) on Thursday said it will provide special liquidity to banks, non-banking financial companies (NBFCs) and microfinance institutions for on-lending to micro, small and medium enterprises that are affected by the COVID-19-related disruptions.
The liquidity will be offered to banks, NBFCs and MFIs as term loans for a tenor of 90 days and for a maximum period of one year, Sidbi said.
"We are ously working towards helping MSMEs survive the crisis created due to the COVID-19 pandemic. Keeping the current situation in mind, we were provided a special liquidity window of Rs 15,000 crore by the Reserve Bank of India (RBI) to enable MSMEs to tide over their liquidity crunch. The funds will be channelized to MSMEs through eligible banks, NBFCs and MFIs," Sidbi's chairman and managing director Mohammad Mustafa said in a release.
With this facility, MSMEs liquidity issues shall be addressed, timely and adequately, he added.
Along with Sidbi, the RBI on April 17 had announced to provide special refinance facilities of Rs 25,000 crore to National Bank for Agriculture and Rural Development (Nabard) and Rs 10,000 crore to National Housing Bank (NHB).
The RBI said the advances will be charged at the repo rate at the time of accessing the facility.
Sidbi said to be eligible under this scheme, a bank (public sector bank, private sector bank, foreign bank and SFBs) should have a sizeable outstanding loan portfolio to MSEs/micro credit and sound financials.
As per the last audited balance sheet, the bank should have a networth of minimum Rs 100 crore, a capital adequacy ratio (CAR) of not less than 9 per cent and net non-performing assets (NPA) ratio not exceeding 10 per cent, the release said.
For NBFCs and MFIs to be eligible, they should have been in operations for at least three years and should have a minimum credit rating of 'BBB-' or equivalent as on March 31, 2020.
The eligible NBFCs should have minimum net owned funds of Rs 20 crore and asset size of at least Rs 50 crore.
The CAR of NBFCs and MFIs should be above the RBI requirements during the last 24 months, Sidbi said. HV MR
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