3 months Free Trail

Get world class research developed by an in house team of professionals backed with strong institutional support. With reports that span across time horizons, styles and easily actionable strategies, you are never too far from executing a winning trade.

Key features and benefits of Registeration :
  • My Portfolio : Access 360° View not only of your Portfolio with Emkay, but all your Investment Portfolios
  • Emkay Research : Get Emkay's exclusive Research Reports & Trading Ideas.
  • My Watch list : Track your favorite stocks, Derivatives, Currencies, Commodities, Mutual funds on the go
  • Markets : Grab Stock Market Information at your fingertips
  • News & Announcements : Stay Updated 24x7 with news that matters.
  • Alerts : Get Alerts on Emkay Research, Trading Ideas, news on your portfolio holdings & watchlist

Generate password

Change password

Forgot Customer Code

Would you like to create a personalised login id for logging in to Emkay Website ?

Change Personalised Login ID

RBI to issue guidelines for harmonisation of NBFCs by month end

Share Source By

Dion Global

07 Feb 2019

Carrying forward the harmonisation process, the Reserve Bank Thursday decided to consider major category of NBFCs like asset finance companies (AFC), loan companies, and investment companies as a single segment.

The guidelines for harmonisation of non-banking financial companies (NBFCs) would be issued by the end of this month.

It has now been decided that rated exposures of banks to all NBFCs, excluding Core Investment Companies (CICs), would be risk-weighted as per the ratings assigned by the accredited rating agencies, in a manner similar to that for corporates.

Exposures to CICs will continue to be risk-weighted at 100 per cent and guidelines in this regard will be issued by the end of February 2019, RBI said in a statement.

RBI further said that it has been decided to harmonise major categories of NBFCs engaged in credit intermediation, viz., Asset Finance Companies (AFC), Loan Companies, and Investment Companies, into a single category.

"The proposed merger of existing categories would reduce to a large extent the complexities arising from multiple categories and also provide the NBFCs greater flexibility in their operations. It will cover 99 per cent of the NBFCs by number. Guidelines in this regard will be issued by the end of February 2019," it said.

Stating that RBI is committed to harmonisation and to move towards activity-based regulation replacing the current entity-based regulation for the NBFC sector, it said the first step in this direction was taken when deposit acceptance regulations were harmonised in November 2014.

Further, with the recent rationalisation and liberalisation of ECB norms, differential rules applicable to various categories of NBFCs stand harmonised.

In view of offshore interest in the Indian Rupee, the Reserve Bank's policy efforts have been to align incentives for non-residents to gradually move to the domestic market for their hedging requirements.

"At the same time, there is a need to improve residents' access to derivatives markets to hedge their currency risks. In order to take forward the process of gradual opening up of the foreign exchange market and also to benefit from a wider range of participants and views, it is proposed to set up a Task Force on Offshore Rupee Markets," it said.

The Task Force will examine the issues relating to the offshore Rupee markets in depth and recommend appropriate policy measures that also factor in the requirement of ensuring the stability of the external value of the Rupee, it said.

Further details about the composition and terms of reference of the Task Force will be be issued separately by the end of February 2019, it added.