**Policy Summary: Special Liquidity Scheme for NBFCs/HFCs**
This policy outlines a scheme approved by the Government of India and implemented by the Reserve Bank of India (RBI) to improve the liquidity position of Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs). The scheme is designed to mitigate potential systemic risks within the financial sector through a Special Purpose Vehicle (SPV).
**Eligibility Criteria:**
To be eligible for the scheme, NBFCs (excluding Core Investment Companies) and HFCs must meet the following conditions:
* Registration with the RBI under the Reserve Bank of India Act, 1934, or the National Housing Bank Act, 1987, respectively.
* Capital to Risk-Weighted Assets Ratio (CRAR/CAR) at or above the regulatory minimum (15% for NBFCs, 12% for HFCs) as of March 31, 2019.
* Net Non-Performing Assets (NNPA) not exceeding 6% as of March 31, 2019.
* Net profit recorded in at least one of the two preceding financial years (2017-18 and 2018-19).
* No reporting under SMA1 or SMA2 category by any bank for borrowings during the year prior to August 01, 2018.
* Investment-grade rating from a SEBI-registered rating agency.
* Compliance with the SPV's collateral requirements (optional, to be determined by the SPV).
**Scheme Details:**
SBICAP, a subsidiary of the State Bank of India, has established an SPV named SLS Trust to manage the scheme. The SPV will purchase short-term papers (Commercial Papers (CPs) and Non-Convertible Debentures (NCDs)) with a residual maturity of no more than three months and an investment-grade rating from eligible NBFCs/HFCs. Proceeds from the sale of these instruments must be used solely to extinguish existing liabilities.
**Timeline:**
The facility is not available for any paper issued after September 30, 2020. The SPV ceased to make fresh purchases after September 30, 2020, and aimed to recover all dues by December 31, 2020, or as subsequently modified under the scheme.
**Contact Information:**
Eligible NBFCs/HFCs may contact the SLS Trust at the following address:
SLS Trust
Apeejay House, 6th Floor
3, Dinshaw Wachha Road, Churchgate
Mumbai 400020
Email Id: infoslstrust.in
**RBI Contact Information:**
Department of Regulation
Non-Banking Financial Companies, Central Office
2nd Floor, Main Office Building,
Shahid Bhagat Singh Marg, Fort,
Mumbai 400 001
Tel No: 91-22-22709038
Email: helpdnbrrbi.org.in
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian financial system.
NBFCsHFCs: Non-Banking Financial Companies and Housing Finance Companies, the target beneficiaries of the special liquidity scheme.
Special Purpose Vehicle SPV: A vehicle created by the Government of India to improve the liquidity position of NBFCsHFCs.
Reserve Bank of India Act, 1934: An act of the parliament of India that formed the basis of the central bank of India.
National Housing Bank Act, 1987: An act to establish the National Housing Bank as the principal agency to promote housing finance institutions.
SBICAP: A subsidiary of the State Bank of India that set up the SPV SLS Trust.
SLS Trust: A Special Purpose Vehicle set up by SBICAP to manage the special liquidity scheme for NBFCsHFCs.
Mumbai, Maharashtra: A city in India where the Central Office of the Reserve Bank of India and the SLS Trust are located.
भारतीय �रजव र् ब�क
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2020-21/01
DoR (NBFC) (PD) CC.No. 113/03.10.001/2020-21 July 01, 2020
All NBFCs/HFCs
Madam/Dear Sir,
Special liquidity scheme for NBFCs/HFCs
The Government of India has approved a scheme to improve the liquidity position of
NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks
to the financial sector. To be eligible under the Scheme, the following conditions should be
met:
a) NBFCs including Microfinance Institutions that are registered with the RBI under the
Reserve Bank of India Act, 1934, excluding those registered as Core Investment
Companies;
b) Housing Finance Companies that are registered under the National Housing Bank
Act, 1987;
c) CRAR/CAR of NBFCs/HFCs should not be below the regulatory minimum, i.e., 15%
and 12% respectively as on March 31, 2019;
d) The net non-performing assets should not be more than 6% as on March 31, 2019;
e) They should have made net profit in at least one of the last two preceding financial
years (i.e. 2017-18 and 2018-19);
f) They should not have been reported under SMA-1 or SMA-2 category by any bank
for their borrowings during last one year prior to August 01, 2018;
g) They should be rated investment grade by a SEBI registered rating agency;
h) They should comply with the requirement of the SPV for an appropriate level of
collateral from the entity, which, however, would be optional and to be decided by the
SPV.
2. As per the Government decision, SBICAP which is a subsidiary of the State Bank of India
has set up a SPV (SLS Trust) to manage this operation. The SPV will purchase the short-
term papers from eligible NBFCs/HFCs, who shall utilise the proceeds under this scheme
solely for the purpose of extinguishing existing liabilities. The instruments will be CPs and
NCDs with a residual maturity of not more than three months and rated as investment grade.
The facility will not be available for any paper issued after September 30, 2020 and the SPV
would cease to make fresh purchases after September 30, 2020 and would recover all dues
by December 31, 2020; or as may be modified subsequently under the scheme.
िविनयमन िवभाग (गैर-ब��कंग िव�ीय कंपिनयां) , क��ीय कायार्लय, 2री मंिज़ल , मुख्य कायार्लय भवन, शहीद भगत �संह माग,र् फोट�, मुंबई-400 001
टेलीफोन:+91-22-22709038, ईमले :helpdnbr@rbi.org.in
Department of Regulation (Non-Banking Financial Companies), Central Office, 2nd Floor, Main Office Building, Shahid Bhagat Singh
Marg, Fort, Mumbai – 400 001
Tel No:+91-22-22709038, Email :helpdnbr@rbi.org.in
�हदं ी आसान ह ैइसका �योग बढ़ाइए3. NBFCs/HFCs, in order to avail the facility, may approach the Trust at the following
address:
SLS Trust, Apeejay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate Mumbai
400020. Email Id: info@slstrust.in
Yours faithfully,
(Manoranjan Mishra)
Chief General Manager
िविनयमन िवभाग (गैर-ब��कंग िव�ीय कंपिनयां) , क��ीय कायार्लय, 2री मंिज़ल , मुख्य कायार्लय भवन, शहीद भगत �संह माग,र् फोट�, मुंबई-400 001
टेलीफोन:+91-22-22709038, ईमले :helpdnbr@rbi.org.in
Department of Regulation (Non-Banking Financial Companies), Central Office, 2nd Floor, Main Office Building, Shahid Bhagat Singh
Marg, Fort, Mumbai – 400 001
Tel No:+91-22-22709038, Email :helpdnbr@rbi.org.in
�हदं ी आसान ह ैइसका �योग बढ़ाइए