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RBI changes public deposit rules for NBFCs
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| Posted Date : 28-Mar-2015 , 08:09:25 am | Posted By CASANSAAR |
The Reserve Bank of India (RBI) on Friday made revisions to the norms for non-banking finance companies (NBFCs).
These now say that if there is a downgrading of credit rating, below the minimum specified investment grade, an NBFC should immediately stop accepting public deposits.
The earlier revised regulatory framework for NBFCs were issued in November 2014.
Also, RBI has said, in the event of downgrading of credit rating below the minimum specified investment grade, an NBFC, being an asset finance company or a loan company or an investment company, shall regularise the excess deposit.
Beside, the NBFC should stop renewing existing deposits. All these should run to maturity. The NBFC should also report the position within 15 working days, to the regional office of RBI where the former is registered.
An asset finance company or a loan company or an investment company having a minimum Net Owned Fund(NOF) as stipulated by RBI and complying with prudential norms may accept or renew public deposits. This, together with the amounts remaining due in the books of the company as on the date of acceptance or renewal of such deposit, not exceeding one and a half times its NOF.
However, RBI said this is subject to the condition that an asset finance company holding public deposits in excess of the limit of one and a half times of its NOF shall not renew or accept fresh deposits till such time these reach the revised limit.
An NBFC-Factor shall ensure that its financial assets in the factoring business constitute at least half its total assets. And, the income derived from the factoring business is not less than half its gross income, said RBI.
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Category : RBI |
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