RBI monetary policy review: Risk weights eased for bank loans to NBFCs

The relaxation in risks weights is expected to make credit cheaper for better rated NBFCs

The central bank on Tuesday said banks can assign risk weights to exposures they have to non-banking financial companies (NBFCs) depending on ratings given to them by accredited credit rating agencies. At present, bank exposure (rated and un-rated) attracts 100 per cent risk weight.  

The RBI also decided to harmonise categories of NBFCs and bring asset finance companies, infrastructure finance firms and infrastructure debt funds under one category. The central bank said this would cover 99 per cent of the NBFCs and the merger will reduce, to a large extent, the complexities arising from multiple categories and provide the NBFCs greater