Norms On Nbfc Exposure To Core Loans Altered
The Reserve Bank of India today modified the prudential norms applicable to non-banking finance companies (NBFCs) in relation to their exposure to infrastructure loans.
It has also tightened its norms on classification of non-performing assets in the sub-standard assets category.
The RBI has also allowed NBFCs to exceed exposure norms in single party by 5 per cent and for single group of parties by 10 per cent when additional exposure is on account of infrastructure related loans and investments.
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The apex bank has also allowed, all investments by NBFCs in AAA rated securitised paper, pertaining to the infrastructure facility, a lesser risk weight of 50 per cent instead of 100 per cent.
The RBI has said that a non-performing asset (NPA) will be classified in sub-standard category for a period of only 18 months, instead of the present norm of 24 months, from the date it is recognised as NPA.
It has also added that the asset will be classified as a a doubtful asset, after an asset has remained in sub-standard category for 18 months, as against the present norm of 24 months.
The RBI specified that for the purpose of encouraging NBFCs to grant infrastructure loans, when infrastructure loans granted by NBFCs are restructured or renegotiated or rescheduled before the assets have been classified as sub-standard, they can continue to be classified as standard assets, subject to certain conditions.
RBI has also pointed that the long-term financing of infrastructure projects may lead to asset- liability mismatches, particularly when such financing is not in conformity with the maturity profile of the NBFCs