Government of India act upon UKIBC recommendations pertaining to financial services
On the back of our most recent submissions to DPIIT and Invest India in May, the UKIBC sent recommendations to the Reserve Bank of India (RBI) and Small Industries Development Bank of India (SIDBI) pertaining to the financial services sector on 27th May.
The recommendations, based on feedback from our members and clients, would help companies to operate more effectively in India currently constrained by lockdown and financial restrictions.
The Government of India has actioned the following:
- Refinancing Facility for Small Industries Development Bank of India (SIDBI): RBI had announced a special refinance facility of ₹15,000 crore (GBP 1.5 billion) to SIDBI for on-lending/refinancing. Advances under this facility were provided at the RBI’s policy repo rate for a period of 90 days. In order to provide greater flexibility to SIDBI in its operations, it has been decided to roll over the facility at the end of the 90th day for another period of 90 days.
- Export Credit: It has now been decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020.
- Moratorium on Term Loan Instalments: In view of the extension of the lockdown and continuing disruptions on account of COVID-19, it has been decided to permit lending institutions to extend the moratorium on term loan instalments by another three months, i.e., from June 1, 2020 to 4 August 31, 2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by another three months.
These forward thinking moves will help banks and NBFCs to support companies across India restrained by liquidity constraints and lockdown restrictions.
You can view the full submission here.