RBI issues new guidelines for infrastructure debt funds by NBFCs

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    Mumbai, May 14 (PTI) The Reserve Bank today capped the average exposure limit for an NBFC to issue infra debt funds at 50 per cent and maximum at 75 per cent of its total capital fund, apart from limiting such issuance to only PPPs which have been successfully operational at least for a year.

    RBI issues new guidelines for infrastructure debt funds by NBFCs

    The central bank announced these changes in a new circular that amends the November 2011 guidelines which sought to allow non-banking finance companies to sponsor infra debt funds (IDFs).

    Accordingly, the RBI has allowed NBFCs to invest only in PPP projects which are at least one year into commercial operations and assigning a risk weight of 50 per cent. "An IDF-NBFC can invest in individual projects up to 50 per cent of its total capital funds.

    An additional exposure of up to 10 per cent could be taken at the discretion of the board of the IDF-NBFC," RBI said in the amended circular.

    The RBI further said that it may, upon specific request, allow an IDF-NBFC an additional exposure up to 15 per cent (over 60 per cent) subject to such conditions as it may deem fit to impose regarding additional prudential safeguards.

    This has been enabled after amending the maximum exposure limit norms as envisaged in para 8 of the November 21, 2011 direction, RBI said.

    The RBI has also amended para 7 of these directions. The RBI said NBFCs can invest only in PPPs and post-commercial operations date infrastructure (COD) projects which have completed at least one year of commercial operations.

    PTI

    Story first published: Saturday, May 16, 2015, 10:21 [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