Non-banking financial companies (NBFCs) can raise funds from overseas. They can borrow from foreign markets to meet their liabilities. It would help to refinance their short term business. The decision on NBFS is taken in the high level meeting of reserve bank on Friday.

The maximum borrowing limit would be either 50% of the firm's net owned funds or $10 million. The maximum duration for borrowing is fixed three years by the apex bank. It has asked all NBFCs to use foreign borrowings for short term liabilities instead of booking fresh assets. NBFCs are also required to fully swap borrowing into rupees for the entire maturity.

The decision of RBI would help NBFCs to solve their liquidity requirements at the times when monetary system is facing serious liquidity crunch. Many NBFCs has hailed the decision of the reserve bank. GE Money, Fullerton India, Barclays Financial and Citi financial would be major beneficiaries in the current liquidity crunch environment.