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Revised draft on NBFCs

Special Correspondent

Banks' exposure limit on single NBFC increased

CHENNAI: The Reserve Bank of India on Thursday issued revised draft guidelines on regulation of systemically important non-banking finance companies.

As per the revised draft (on which responses have been invited up to December 7), banks' exposure on a single NBFC (both deposit-taking and non-deposit-taking) will be restricted to ten per cent of their capital funds (as against five per cent of net worth as per the draft issued on November 3) and to all NBFCs up to 40 per cent of their capital funds (40 per cent of net worth as per the November 3 draft).

These limits may be exceeded by five per cent and ten per cent of capital funds, respectively, if the additional exposure is on account of funds on-lent by the NBFCs to the infrastructure sector.

All systemically important non-deposit taking NBFCs shall maintain a minimum capital adequacy ratio of 10 per cent and comply with single and group exposure norms, which are similar to those applicable to deposit taking NBFCs.

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