RBI Revises NBFCs' Prudential Norms

Posted By:
Subscribe to GoodReturns

Mumbai: The Reserve Bank on Friday revised regulations for non-banking finance lenders by directing them to get themselves rated by March 2016, and those failing to achieve investment grade ratings should not accept fresh deposits or renew older ones.

"Those asset finance companies (AFCs) that do not get a minimum investment grade rating by the end of March 2016, shall not renew existing deposits or accept fresh deposits thereafter," it said in the revised regulatory framework on NBFCs notified late this evening.

RBI Revises NBFCs' Prudential Norms

Till March 2016, unrated companies or those with a sub-investment grade, have been allowed to only renew existing deposits on maturity, but barred from accepting fresh deposits.

It can be noted that the Reserve Bank had come out with a new regulatory framework for NBFCs last November, in which it insisted on having a much stronger capital base, failing which they would lose their registration.

In the revised norms released tonight, RBI said if a company's rating is downgraded, an NBFC should regularise the excess deposit with immediate effect, stop accepting fresh public deposits and renewing existing deposits.

In such an event, all existing deposits should runoff to maturity and NBFCs should report to the concerned RBI's Regional Offices within 15 days.

The RBI has also tweaked rules in respect of net-owned funds, and pegged the mandatory requirement at Rs 2 crore for all NBFCs and has given time till April 2017 to comply.

PTI

Read more about: rbi nbfc
Story first published: Saturday, March 28, 2015, 10:24 [IST]
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

Find IFSC

Get Latest News alerts from Goodreturns

We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more