How government is stepping up efforts to ease liquidity? - Letsdiskuss
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leena legants

Blogger | Posted 16 Nov, 2018 |

How government is stepping up efforts to ease liquidity?

singha kash

Blogger | Posted 24 Apr, 2020

The most ideal advance for anticipation of NPAs is "Avoidance is superior to the fix"

The two primary concern technique of forestalling slippage of standard resources into NPA class and lessening NPAs through money recuperation, up degree, bargain and repayments.

Forestalling NPAs

At the pre-payment stage, examination strategies of bank should be honed. All specialized, monetary, business, hierarchical and money related parts of the venture should be surveyed all things considered. Investors ought to fulfill themselves that the venture is in fact achievable concerning specialized skill, size of creation and so forth. On the off chance that you endorse more than the real prerequisite the odds of going that account into NPA is in every case HIGH.

A significant reason for NPA is obsession of ridiculous reimbursement plan, reimbursement calendar might be fixed considering incubation or ban period, gathering, pay age, surplus accessible and so forth. On the off chance that the reimbursement plan is faulty both regarding quantum of portion and time of recuperation, resources tend to become NPA.

At the post – payment stage, banks ought to guarantee that the development doesn't turn into a NPA by appropriate development and supervision to guarantee the two resources creation and resources usage and sitting tight for the obligatory period before arranging a benefits as NPA, the broker should search for early notice signs of NPA.

Avichal Singh

Project Manager at The Economic Times | Posted 02 Dec, 2018

India is facing worst liquidity crunch in the banking system in two years. The risk is adding to refinancing risks for shadow banks shaken by a rare default in the country’s money markets.
Prime Minister Narendra Modi led government has sought support for financial markets to combat with the current situation in India. The government has also sought support and recommendation on this from other agencies.

The financial institutions in India have given following suggestions to further ease up liquidity into the system:

1. Dedicated liquidity window for NBFCs
2. Reduce the minimum tenor of external commercial borrowing for housing finance companies to 3 years from five years earlier.
The Reserve Bank of India or RBI, which regulates banks and financial institutions in India, responsible to manage money supply or liquidity into the system.

Time to time RBI panel on monetary policy meets and announces regulatory norms to maintain liquidity in India.

Here’s a snapshot of latest liquidity operations by RBI