(ET)
The Modi government and the central bank are together working at relieving the stress of the financial and the real estate sector. Learns that talks are on at a high-level on whether a mini version of the troubled asset relief program that the US government undertook in 2008 during the financial crisis could be done to alleviate the stress of India’s NBFC sector. Nirmala Sitharaman backed Finance ministry along with RBI are discussing a new scheme to unburden stressed assets from top 25 NBFCs. Sources indicate that the creation of new RBI backed SPV or Special Purpose Vehicle could be mulled that will buy stressed assets from financial firms, thereby removing the stress in the NBFCs. NBFC shares also moved higher after reports of Finance Ministry wanting RBI to take over stressed assets NBFCs. “Talks are on and various rounds of discussions have happened with the central bank on a mini- TARP like programme. RBI could be the buyer of last resort”, said a source in the know of the development.
