NEW DELHI: Seeking to calm the nerves of worried investors,
Finance Minister Arun Jaitley said Monday that the government would take all measures to ensure adequate liquidity for non-banking financial companies (NBFCs) and mutual funds.
The minister's remarks come in the wake of stock markets witnessing sudden and stiff fall in intra-day trade on Friday over concerns of liquidity crisis being faced by some of the NBFCs.
"The Government will take all measures to ensure that adequate liquidity is maintained/provided to the NBFCs, the mutual funds and the SMEs," Jaitley tweeted ahead of the opening of stock markets.
The statement comes after the stocks, forex and bonds markets turned volatile on Friday on worries over liquidity concerns around non-banking finance companies, after a series of defaults from Infrastructure Leasing & Financial Services (IL&FS) spooked investors.
In a flash crash on Friday, the Sensex lost more than 1,100 points in mid-day trade, before it closed 280 points in the red.
There are liquidity concerns following default in repayment of loans by diversified IL&FS group. Another
housing finance company, DHFL, too is reportedly facing liquidity crisis.
The Reserve Bank of India (RBI) and market regulator Sebi said on Sunday that they were closely monitoring the developments in the financial sector and were ready to take "appropriate actions" to calm the jittery investors.
At 9.30 am, the markets were still volatile, with both Sensex and Nifty losing more than 0.30 per cent in early trading.
