NEW DELHI: Finance Minister Nirmala Sitharaman on Friday said that she has asked public sector banks to give loans instead of using reverse repo in order to boost liquidity in the market.
Speaking at a Assocham’s annual conference, Sitharaman asserted that there is no government interference on banks’ decision making. “Banks are free to decide on their own.”
“Liquidity problem was identified and worked upon by the government. I spent time with the Reserve Bank of India and banks to establish where the liquidity was getting locked up,” she added.
After the collapse of non-banking finance company IL&FS in September last year, liquidity shrank up in the market that led to the collapse of few more companies such as DHFL.
Sitharaman said she is ensuring that assets of NBFCs are also being taken up and even the bottom-most NBFCs get liquidity for business.
The Finance Minister said that she has a list of 50 projects that are seeking money from the recently established realty fund.
The government in November had announced the setting up of a Rs 25,000 crore alternative investment fund (AIF), aimed at providing relief to developers with unfinished projects to ensure delivery of homes to buyers.
The government had earmarked Rs 10,000 crore towards the fund, while Life Insurance Corporation and State Bank of India would also infuse money.
Source: Economic Times