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PSBs to buy ₹14,667 crore NBFC bonds, CPs under extended PCGS

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Finance minister Nirmala Sitharaman today announced that under the Partial Credit Guarantee Scheme (PCGS) public sector banks have approved the purchase of bonds and commercial papers issued by 67 NBFCs amounting to 14,667 crore.

“The Partial Credit Guarantee Scheme (PCGS) was revamped under the #AatmanirbharBharat Package to support the liability side of NBFCs by providing a 20% portfolio guarantee to Public Sector Banks for the purchase of Bonds/Commercial Papers rated AA and below issued by NBFCs,” Sitharaman said in a tweet.

“As of 10 July 2020, under the extended PCGS, #PSBs have approved for purchase Bonds/Commercial Papers issued by 67 NBFCs amounting to 14,667 crore, of which 6,845 crore is for Bonds/CPs rated below AA, providing liquidity support to NBFCs with lower rated Bonds/CPs,” she said.

Further, the purchase of bonds/commercial papers of 6,125 crore, including 5,550 crore of bonds/commercial papers rated below AA, is currently under various stages of approval or at negotiation stage, she said.

The PCGS was revamped under the Aatmanirbhar Bharat initiative to support the liability side of NBFCs by providing a 20 per cent portfolio guarantee to public sector banks for the purchase of bonds and commercial papers rated AA and below issued by NBFCs.

The government has taken a series of measures in recent weeks to help various sectors in offsetting the impact of COVID-19 crisis amid a general slowdown in the economy due to weakening demand and falling private investments.

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