Saturday, September 15, 2012

RBI TIGHTENS NORMS FOR LOAN SECURITISATION BY NBFCs

The Reserve Bank of India (RBI) has tightened the Non-banking finance company (NBFCs) securitization norms. The Reserve bank of India (RBI) has said that a loan up to two years can be
securitized only after payment of three monthly installments by the borrower. The limit for loans
between two and five years is six monthly installments and above five years, 12 monthly installments. With regard to minimum retention requirement (MRR) for securitization, the
guidelines said the NBFCs selling loans will have to retain five per cent of the amount if the loan is
for less than two year period and 10 per cent if it is of over two years.

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