RBI releases draft circular on Credit/investment Concentration Norms – Government owned NBFCs
FinTech BizNews Service
Mumbai, January 16, 2024: As substantial time has elapsed since Government owned NBFCs were brought within the ambit of prudential regulations in May 2018, a review of the exposure norms for these NBFCs has been carried out and it has been decided to withdraw the case-by-case basis exemptions granted to Government NBFCs. Please refer to paragraph 91.7 of Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023 as per which Government owned NBFCs set up to serve specific sectors are permitted to approach the Reserve Bank for exemptions, if any, from credit/investment concentration norms.
Henceforth, the Government NBFCs shall be guided by the exposure norms and limits contained in the following circulars as applicable to them: -
3. In order to address implementation challenges and to ensure a non-disruptive transition, it has been decided that the existing breaches (including drawdown of existing sanctioned limits), if any, of the NBFCs as of the date of this circular shall be allowed to run-off till maturity subject to the condition that no further exposure is taken to such obligors so long as they are in breach of the prudential exposure limits unless the additional exposure is fully secured by eligible credit risk transfer instruments. The eligible credit risk transfer instruments for this purpose shall be those prescribed under paragraph 3 of the circular on Credit/Investment Concentration Norms – Credit Risk Transfer dated January 15, 2024
