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Showing posts from May 14, 2019

NBFCs facing liquidity crunch call for ease in securitisation norms

The NBFC sector wants securitisation guidelines to be amended to do away with the prescribed minimum holding period and minimum retention requirement. NBFCs are demanding relaxation of securitisation norms to ease funding woes and to defer the rules on working capital loans which they say are compounding their problems inflicted by the credit squeeze. The NBFC sector wants securitisation guidelines to be amended to do away with the prescribed minimum holding period and minimum retention requirement. The sector wants minimum holding period for loans with maturity of 2-5 years be reduced from 6 months to 3 months. On December 5, RBI issued a circular asking for compulsory bifurcation of the working capital for borrowers enjoying an aggregate fund-based working capital finance of Rs 150 crore and above from the banks. In a letter to RBI governor, the NBFC sector has asked for a year delay in implementation of the new working capital norms keeping in mind the criticality of the sector for …

Retail inflation rises to 6-month high, poses uncertainty for rate cut

The retail price inflation rose to a six-month high of 2.92 per cent in April, pushed up by costlier food items The beginning of the financial year 2019-20 saw a bit of rising inflationary pressures, but the rate of price rise was still below the average of the Reserve Bank of India’s (RBI’s) mandate of 2-6 per cent. Experts are divided whether the monetary policy committee (MPC) of the RBI will cut the policy rate in June. The retail price inflation rose to a six-month high of 2.92 per cent in April, pushed up by costlier food items. However, food inflation was still 1.1 per cent in the month against 0.3 per cent in the previous month. It was in March that food inflation broke the five-month trend of deflation. This may augur well for farmers who faced rural distress. Inflation in urban areas rose to 4.64 per cent in April from 3.47 per cent in the previous month, which may not go down well with the middle class, if the trend persists. Much of the inflation in food items is generally at…