Business Standard

Reserve Bank of India's latest norms won't be disruptive to NBFCs

Intend to narrow regulatory arbitrage between banks and shadow banks

RBI, Reserve Bank of India
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Subrata Panda Mumbai
The latest norms concerning large exposures, additional disclosures, and lending to directors laid down by the Reserve Bank of India (RBI) for non-banking financial companies (NBFCs) are in line with its stated objective of narrowing the regulatory arbitrage between banks and shadow banks, observed industry insiders, adding it would be broadly non-disruptive in nature for the sector.
On Tuesday, the central bank mandated exposure limits for NBFCs in the upper layer, in line with commercial banks, by capping their aggregate exposure towards one entity at 20 per cent of capital base, extendable by another 5 per cent with board approval.
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