You are here: Home » Finance » News » NBFCs
Business Standard

RBI relaxes NBFCs' asset securitisation norms as sector faces IL&FS crisis

Relaxation on the minimum holding period will be allowed when the NBFC retains 20% of the book value of these loans, said RBI

Reuters  |  Mumbai 

News digest: RBI move impact, payroll additions, US stocks fall, and more

The (RBI) on Thursday relaxed rules for non-banking financial companies (NBFCs) to sell or securitise their loan books, in a bid to ease persistent stress in the sector.

can now securitise loans of more than five-year maturity after holding those for six months on their books, the said.

Earlier, they had to hold these assets for at least one year, a banker said.

However, the relaxation on the minimum holding period will be allowed when the NBFC retains 20 per cent of the book value of these loans, the RBI said.

ALSO READ: Tight liquidity may prompt banks to stay away from NBFC, HFC bonds: Report

India's NBFCs, loosely known as shadow banks, are facing stress on their balance sheets after a debt crisis hit a large infrastructure funding company in September, triggering panic amongst investors and a cash crunch in the sector.

Following the massive volatility in the financial markets, the RBI and the government have taken steps to ringfence the crisis and support financing needs of the sector, including providing additional liquidity to banks and credit enhancement for refinancing needs.

ALSO READ: RBI must provide more liquidity to NBFCs to boost lending: DEA Secretary

First Published: Thu, November 29 2018. 18:54 IST
RECOMMENDED FOR YOU