Tuesday, January 15, 2013

RBI PROPOSES SLEW MEASURES TO STRENGTHEN THE NBFC SECTOR


  • Provisioning for standard assets to be raised from 0.25 % to 0.40 % of the outstanding loans.
  • The limit for acceptance of deposits for rated Asset Finance Companies reduced from four times to 2.5 times their net owned funds.
  • Unrated NBFCs, including AFCs, will not be permitted to accept deposits
  • NBFCs will require prior nod of the Reserve Bank of India (RBI) for ownership change (increase of shareholding to the extent of 25 per cent or more of the paid-up equity capital).
  • For any acquisitions and for all mergers by or of an NBFC, the NBFC involved should approach RBI (even before filing for the same in the courts) to ensure adherence to the basic tenets of corporate governance.
  • Appointment of CEOs of NBFCs with asset size of Rs 1000 crore and above would require the RBI's approval.
  • RBI said that Tier l capital (core capital) will be raised to 12 per cent for all captive NBFCs (over 90 per cent of total assets are on financing parent company's products/ services). Further, for NBFCs that are into lending to/investment in sensitive sectors namely, capital market, commodities and real estate, to the extent of 75 per cent or more of their total assets the Tier l capital will be raised to 12 per cent.

0 comments:

Post a comment