Skip to content
Subscriber Only

India Weighs New Credit Line for Funds Hit by Cash Crunch

  • RBI, finance ministry are in favor of proposal from industry
  • Move would also ease short-term borrowing costs for companies
Bloomberg business news
India Locks Down 1.3 Billion People in Biggest Isolation Effort
Updated on

India’s central bank is weighing opening a new credit facility for banks aimed at boosting their lending to mutual funds, which have been hit by a flood of redemptions, according to people with knowledge of the matter.

The Reserve Bank of India and the finance ministry are in favor of a proposal from the industry regulator to open a cash window that fund houses can tap via their banks, the people said, asking not to be identified as the discussions are private. Other measures to ease a growing cash crunch are being discussed and a final decision is expected soon, one of the people said.