Seeking to calm the nerves of worried investors, Finance Minister Arun Jaitley said on 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 the 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 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.
There are liquidity concerns following the default in repayment of loans by a diversified IL&FS group.
Another housing finance company, DHFL, too is reportedly facing the liquidity crisis.