Finance Minister Arun Jaitley on Friday met heads of top public sector banks to review the cash position in the system amid concerns of a liquidity crunch being faced by some sectors, sources said.
Banks said they have enough cash to take care of the liquidity crunch being faced by the non-banking finance companies, they added.
The meeting was also attended by the Department of Financial Services Secretary and Department of Economic Affairs Secretary.
Heads of six large public sector banks have assured the government of adequate liquidity in the system even as sectoral concerns prevail, the sources said.
Among the banks that were present at the meeting were State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank, and Bank of India.
Sources said the housing finance regulator National Housing Bank (NHB) has lined up an expanded refinance window to deal with the liquidity concerns of the housing finance sector.
Earlier this month, NHB increased the refinance limit to Rs 300 billion for housing finance companies for 2018-19. It had originally set the refinance target at Rs 240 billion.
Shares of most of the housing finance firms, including DHFL, have been hammered in the past few weeks due to liquidity concerns triggered by debt defaults by IL&FS.
Earlier Friday, Financial Services Secretary Rajiv Kumar said the government will soon announce measures to curb liquidity concerns and the deteriorating asset quality among financial institutions.
Meanwhile, the Reserve Bank Friday said it will inject Rs 400 billion into the system in November through purchase of government securities as it looks to meet festive season demand for funds.
For the month of October, the central bank has already injected Rs 360 billion in the system through Open Market Operations (OMO).
"Based on an assessment of the durable liquidity needs going forward, RBI has decided to conduct purchase of Government securities under OMOs for an aggregate amount of Rs 400 billion in the month of November 2018," the central bank said in a release.
The Reserve Bank of India (RBI) had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and that the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.
Banks said they have enough cash to take care of the liquidity crunch being faced by the non-banking finance companies, they added.
The meeting was also attended by the Department of Financial Services Secretary and Department of Economic Affairs Secretary.
Heads of six large public sector banks have assured the government of adequate liquidity in the system even as sectoral concerns prevail, the sources said.
Among the banks that were present at the meeting were State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank, and Bank of India.
Sources said the housing finance regulator National Housing Bank (NHB) has lined up an expanded refinance window to deal with the liquidity concerns of the housing finance sector.
Earlier this month, NHB increased the refinance limit to Rs 300 billion for housing finance companies for 2018-19. It had originally set the refinance target at Rs 240 billion.
Shares of most of the housing finance firms, including DHFL, have been hammered in the past few weeks due to liquidity concerns triggered by debt defaults by IL&FS.
Earlier Friday, Financial Services Secretary Rajiv Kumar said the government will soon announce measures to curb liquidity concerns and the deteriorating asset quality among financial institutions.
Meanwhile, the Reserve Bank Friday said it will inject Rs 400 billion into the system in November through purchase of government securities as it looks to meet festive season demand for funds.
For the month of October, the central bank has already injected Rs 360 billion in the system through Open Market Operations (OMO).
"Based on an assessment of the durable liquidity needs going forward, RBI has decided to conduct purchase of Government securities under OMOs for an aggregate amount of Rs 400 billion in the month of November 2018," the central bank said in a release.
The Reserve Bank of India (RBI) had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and that the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.
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