Nirmala Sitharaman (Source: LSTV)
Nirmala Sitharaman (Source: LSTV)

Budget 2019-20: Six months' partial credit guarantee proposed for PSBs

ANI | Updated: Jul 05, 2019 16:11 IST

New Delhi [India], July 5 (ANI): Finance Minister Nirmala Sitharaman on Friday said the government has proposed to provide a one-time six-month partial credit guarantee to public sector banks (PSBs) for first loss of up to 10 per cent.
"For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rs 1 lakh crore during the current financial year, the government proposes to provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10 per cent," she said while presenting the Union Budget 2019-20.
The Minister informed that to bring more participants, especially NBFCs, not registered as NBFCs-Factor, on the Trade Receivable Discounting System (TReDS) platform, amendment in the Factoring Regulation Act, 2011 is necessary and steps will be taken to allow all NBFCs to directly participate on the platform.
Sitharaman proposed to set up an Expert Committee to study the current situation relating to long-term finance and past experience with development finance institutions and recommend the structure and required flow of funds through development finance institutions.
For efficient and conducive regulation of the housing sector, Sitharaman proposed to return the regulation authority over the Housing Finance Sector from the National Housing Bank (NHB) to the Reserve Bank of India (RBI).
"Necessary proposals have been placed in the Finance Bill," she said.
Sitharaman also said steps are proposed to be taken to separate the National Pension System (NPS) Trust from Pension Fund Regulatory and Development Authority (PFRDA) with appropriate organisational structure.
To facilitate on-shoring of international insurance transactions and to enable the opening of branches by foreign reinsurers in the International Financial Services Centre, the Finance Minister said that it is proposed to reduce Net Owned Fund requirement from Rs 5,000 crore to Rs 1,000 crore. (ANI)