RBI not looking at liquidity facility for NBFCs: Dy Guv Vishwanathan
5 years, 3 months ago

RBI not looking at liquidity facility for NBFCs: Dy Guv Vishwanathan

Live Mint  

Mumbai: Reserve Bank of India has ruled out any special liquidity facility for Non Banking Financial Institutions saying there is enough in the system to meet their needs for borrowings and it is for the lenders to take a call on lending to the NBFCs. "Reserve Bank's position is that there is adequate liquidity in the system and it is for the lenders to take a view on which borrower to give money to and I do not think at this moment we are looking at a liquidity facility for NBFCs", RBI deputy Governor N. S. Vishwanathan said in an analyst meet after the Monetary Policy Committee meeting. To a question on the steps RBI is taking to ensure stability of financial system in the country and see the solvency of some of the housing finance companies, Jain said, "RBI makes periodic assessment of risk and vulnerability of the financial system to shocks emanating both from domestic and external adverse developments and takes mitigating steps to enhance its resilience. RBI recently put a draft circular on the "Liquidity Risk Management Framework for NBFCs and Core Investment Companies to be adopted by all deposit taking NBFCs; non-deposit taking NBFCs with an asset size of 100 crore and above for stronger Asset Liability Management framework in the NBFCs. In addition, the draft proposes to introduce Liquidity Coverage Ratio for all deposit taking NBFCs; and non-deposit taking NBFCs with an asset size of 5000 crore and above.

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History of this topic

Central Bank's new framework can shave 10-30 percentage points off bank LCRs
5 months, 1 week ago

Central Bank's new framework can shave 10-30 percentage points off bank LCRs

New Indian Express  

MUMBAI: The proposed higher mark-ups that the Reserve Bank is seeking from banks in the draft liquidity coverage ratio framework will impact the LCRs by 10-30 percentage points, thus reducing the cushion now available with banks over the regulatory requirement of 100 percent such ratio. In an analysis of 31 banks, Crisil ratings shows aid the near-term impact on credit …

RBI Deputy Governor Criticizes NBFC Demands, Warns P2P Lenders
11 months ago

RBI Deputy Governor Criticizes NBFC Demands, Warns P2P Lenders

Deccan Chronicle  

The Reserve Bank of India deputy governor M Rajeshwar Rao on Friday criticised the frequent demands from Non-Banking Finance Companies to convert into a bank or their demands to be allowed to accept public deposits.Speaking at the CII NBFC Summit, Rao clarified that the regulations for even entities in the top-most tier of NBFCs are not at par with universal …

RBI deputy governor urges banks to be prudent on lending to NBFCs
1 year ago

RBI deputy governor urges banks to be prudent on lending to NBFCs

Live Mint  

Mumbai: Banks need to reconsider whether they want to be part of lending consortiums to non-bank financiers that have scores of other lenders – up to 40 at times – to improve their monitoring of borrowers' use of sanctioned loans, RBI deputy governor Swaminathan J said. The deputy RBI governor was responding to a question from SBI managing director Ashwini …

Here's why NBFCs will have to look beyond banks for funds
1 year ago

Here's why NBFCs will have to look beyond banks for funds

Live Mint  

Mumbai: Non-bank lenders that borrow heavily from commercial banks to lend further may need to diversify their funding sources in the year ahead, given the rising competition for bank credit, and higher risk weights on loans to these lenders, experts said. “The idea is to improve funding access to productive sectors, but the regulations can lead to customers paying more …

NBFCs relying more on bank loans: RBI
1 year, 3 months ago

NBFCs relying more on bank loans: RBI

Live Mint  

Mumbai: Domestic non-banking financial companies, especially those in the upper-layer category, are increasingly relying on bank borrowings as their primary source of funding, according to an analysis in Reserve Bank of India ’s September bulletin. “During the assessment period, NBFCs’ reliance on banks increased steadily due to low interest environment and lag monetary policy transmission," the article said. Direct bank …

RBI names 16 leading NBFCs in its upper layer list
2 years, 3 months ago

RBI names 16 leading NBFCs in its upper layer list

Live Mint  

The Reserve Bank of India on Friday released a list of 16 upper layer non-banking finance companies that must adhere to enhanced regulation. The 16 companies in the NBFC-UL list are: LIC Housing Finance, Bajaj Finance, Mahindra & Mahindra Financial Services, Shriram Transport, Tata Sons, L&T Finance, Indiabulls Housing Finance, Piramal Capital & Housing Finance, Cholamandalam Investment and Finance Co., …

RBI extends risk-based internal audit system to housing finance companies
3 years, 6 months ago

RBI extends risk-based internal audit system to housing finance companies

India TV News  

The Reserve Bank on Friday extended the risk-based internal audit system to select housing finance companies to enhance the quality and effectiveness of their internal audit system. An effective RBIA is an audit methodology that links an organisation's overall risk management framework and provides an assurance to the Board of Directors and the senior management on the quality and effectiveness …

India’s risk-based internal audit requirement for NBFCs is credit positive: Moody’s
3 years, 11 months ago

India’s risk-based internal audit requirement for NBFCs is credit positive: Moody’s

Live Mint  

The Reserve Bank of India guidelines for non-banking finance companies to implement a risk-based internal audit framework in line with banks is credit positive, Moody's Investors Service said on Monday. "The requirement is credit positive because it adds another layer of risk monitoring and improves the companies' resilience to unexpected shocks," said Moody's in its latest credit outlook. Moody's said …

NBFCs have an edge in banking licence race
4 years, 1 month ago

NBFCs have an edge in banking licence race

Live Mint  

Large non-bank lenders stand to gain the most from the Reserve Bank of India panel’s proposal to allow large companies and shadow lenders into banking services, experts said. More importantly, it would allow RBI to increase regulatory oversight over some of the large shadow lenders, particularly after the collapse of Infrastructure Leasing & Financial Services Ltd and Dewan Housing Finance …

RBI announces Co-lending scheme for banks, NBFCs for priority sector
4 years, 2 months ago

RBI announces Co-lending scheme for banks, NBFCs for priority sector

Deccan Chronicle  

Mumbai: In a bid to improve the flow of credit to the unserved sector of the economy and to make funds affordable for them, the Reserve Bank of India on Wednesday revised the guidelines for banks and NBFCs including housing finance companies to jointly lend to the priority sector. The primary focus of the revised scheme, rechristened as “Co-Lending Model”, …

Amid churn, non-banks explore consolidation option
4 years, 5 months ago

Amid churn, non-banks explore consolidation option

Live Mint  

India’s non-bank lenders, staring at ₹1.51 trillion debt repayments due in the next six months, are rushing to raise fresh equity and pursuing mergers with bigger peers to avert defaults, as the coronavirus pandemic darkens the outlook for the sector that has struggled since the collapse of Infrastructure Leasing and Financial Services Ltd nearly two years ago. “In many instances, …

NBFCs will continue to face liquidity, asset quality risks: Fitch
4 years, 6 months ago

NBFCs will continue to face liquidity, asset quality risks: Fitch

Live Mint  

MUMBAI: India's non-bank financial companies will continue to face elevated liquidity and asset quality risks, even as economic activity picks up with the easing of the nationwide lockdown, according to global rating agency Fitch Ratings. Non-banks, facing a liquidity shortage ever since Infrastructure Leasing and Financial Services Ltd defaulted on its payment obligations, have been under renewed strain as banks …

RBI lays down guidelines for NBFCs, HFCs under special liquidity scheme
4 years, 6 months ago

RBI lays down guidelines for NBFCs, HFCs under special liquidity scheme

Live Mint  

The Reserve Bank of India on Wednesday laid down the eligibility criteria for non-bank financiers and mortgage lenders to utilize a special liquidity scheme that was approved by the Union cabinet in May. The funds thus received from the sale of securities would be used by the SPV to buy short-term investment-grade papers from eligible NBFCs and HFCs, providing them …

The problem with the liquidity push
4 years, 7 months ago

The problem with the liquidity push

The Hindu  

The present government’s much-hyped, post-COVID-19 relief and recovery package has disappointed many. In its effort to tote up a 10% of GDP relief-cum-stimulus figure, the government has relied heavily on measures aimed at pushing credit to banks, non-banking financial companies and businesses big and small, which are expected to use borrowed funds to lend to others, make payments falling due, …

Coronavirus impact: NBFCs urge RBI to allow draw-down from reserves for provisioning
4 years, 7 months ago

Coronavirus impact: NBFCs urge RBI to allow draw-down from reserves for provisioning

Firstpost  

Non-banking financial companies on Friday requested the Reserve Bank of India to allow them to draw-down from their reserves for making additional provision for expected losses due to COVID-19 pandemic Mumbai: Non-banking financial companies on Friday requested the Reserve Bank of India to allow them to draw-down from their reserves for making additional provision for expected losses due to COVID-19 …

Coronavirus Outbreak: RBI governor Shaktikanta Das meets NBFCs, MFs sector; reviews liquidity situation
4 years, 8 months ago

Coronavirus Outbreak: RBI governor Shaktikanta Das meets NBFCs, MFs sector; reviews liquidity situation

Firstpost  

Operations of NBFCs have commenced from Monday as the government eased restrictions for the lockdown. Mumbai: Reserve Bank governor Shaktikanta Das on Monday reviewed liquidity position and ways to promote lending to the MSME sector during a meeting with representatives of non-banking financial companies and mutual funds amid the lockdown induced by the COVID-19 pandemic. Some of the issues discussed …

Coronavirus Outbreak: SIDBI to provide 90-day term loans to banks, NBFCs, MFIs for onward lending to MSMEs
4 years, 8 months ago

Coronavirus Outbreak: SIDBI to provide 90-day term loans to banks, NBFCs, MFIs for onward lending to MSMEs

Firstpost  

SIDBI will offer liquidity to banks, NBFCs and MFIs as term loans for a tenor of 90 days and for a maximum period of one year, Mumbai: Small Industries Development Bank of India on Thursday said it will provide special liquidity to banks, non-banking financial companies and microfinance institutions for on-lending to micro, small and medium enterprises that are affected …

RBI measures for NBFCs may not boost credit flow to the broader economy: Moody's
4 years, 8 months ago

RBI measures for NBFCs may not boost credit flow to the broader economy: Moody's

India TV News  

The Reserve Bank of India's measures to help facilitate funds to the NBFC sector is unlikely to boost the credit flow to the broader economy as NBFCs would shore up their own liquidity rather than on-lending to customers, Moody's Investors Service said on Sunday. Moody's Investors Service Vice-President Alka Anbarasu said the measures will soften the near-term credit negative impact …

RBI ensures liquidity support to NBFCs
4 years, 8 months ago

RBI ensures liquidity support to NBFCs

The Hindu  

The Reserve Bank of India has announced a host of measures to provide liquidity support to the non-banking finance companies, apart from giving them certain benefits for loans extended to the commercial real estate sector. To begin with, the banking regulator said banks to have to invest the funds availed under targeted long term repo operations, in investment grade bonds, …

Moratorium on repayment puts NBFCs in a spot
4 years, 8 months ago

Moratorium on repayment puts NBFCs in a spot

The Hindu  

Non-banking financial companies may face a tough time following the Reserve Bank of India’s recent directive on providing a moratorium on repayment. “With collections being minimal and the moratorium only for their borrowers, raising fresh funds is critical, especially because NBFCs, unlike banks, do not have access to systemic sources of liquidity and depend significantly on wholesale funding,” it said. …

Is it right solution to bring NBFCs under IBC, Ashok Leyland posts weak Q2 results; read this and more on Moneycontrol Pro
5 years, 1 month ago

Is it right solution to bring NBFCs under IBC, Ashok Leyland posts weak Q2 results; read this and more on Moneycontrol Pro

Firstpost  

Despite adequate liquidity in the banking system, many NBFCs are finding it difficult to raise money because no one trusts their balance sheets. Moneycontrol Pro offers curated markets data, independent equity analysis, insights into investment styles and exclusive trading recommendations. As resolution proves elusive for defaulting NBFCs such as Dewan Housing Finance Ltd the government is considering allowing some financial …

NBFCs not enthused with revised ALM norms: Kotak
5 years, 2 months ago

NBFCs not enthused with revised ALM norms: Kotak

Live Mint  

The RBI norms on liquidity and asset quality of non-banking financial companies will offer some comfort and cushion to the market, but concern over the wholesale segment's asset quality remains a challenge for debt market players, broking firm Kotak said on Tuesday. The Reserve Bank had on Monday issued final guidelines on Asset Liability Management and Liquidity Coverage Ratio framework …

RBI asks NBFCs to adopt better tools to detect liquidity strains early
5 years, 2 months ago

RBI asks NBFCs to adopt better tools to detect liquidity strains early

Live Mint  

Reserve Bank on Monday asked the already fund-starved NBFCs to adopt better risk monitoring tools that capture the strains early on and also to maintain a liquidity buffer as per the mandated liquidity coverage ratio. It also asked NBFCs to segregate into granular buckets the 1-30-day time bucket in the statement of structural liquidity to 1-7, 8-14, and 15-30 days …

RBI governor Shaktikanta Das rules out asset quality review of NBFCs for now
5 years, 4 months ago

RBI governor Shaktikanta Das rules out asset quality review of NBFCs for now

Firstpost  

Mumbai: Even as he reiterated the regulatory resolve to not let any large NBFC fail, Reserve Bank governor Shaktikanta Das Monday ruled out ordering an asset quality review of the systematically important shadow banks for now. Addressing the press on the sidelines of the national banking conference being organised by the industry lobby Ficci, Das ruled out ordering an asset …

Central bank opens liquidity tap to help stressed shadow banks
5 years, 5 months ago

Central bank opens liquidity tap to help stressed shadow banks

Live Mint  

The Reserve Bank of India on Wednesday announced two key measures to help stressed non-banking financial companies raise funds from banks. “Under the revised guidelines on large exposure framework that came into effect from 1 April 2019, a bank’s exposure to a single NBFC is restricted to 15% of its Tier I capital, while for entities in the other sectors, …

NBFC crisis: Liquidity steps for non-banking finance companies too little, too short-term, says Fitch report
5 years, 5 months ago

NBFC crisis: Liquidity steps for non-banking finance companies too little, too short-term, says Fitch report

Firstpost  

Mumbai: The government measures to provide partial credit guarantee to public sector bank on their asset purchases from NBFCs can ease funding pressure only for the short-term, says a report. In the budget, the government had said for purchase of high-rated pooled assets of financially-sound NBFCs, amounting to Rs 1 trillion during the current financial year, it will provide a …

Guidelines for PSU banks to pick pooled assets of NBFCs likely this week
5 years, 5 months ago

Guidelines for PSU banks to pick pooled assets of NBFCs likely this week

Live Mint  

New Delhi: In a bid to deal with stress in NBFC sector, guidelines will be issued soon for state-owned banks to take over pooled assets of non-banking financial companies, a finance ministry official said. To address the stress in the sector, Finance minister Nirmala Sitharaman in the Budget proposed that public sector banks would purchase high-rated pooled assets of financially …

Opinion | The budget’s NBFC lifeline needs rework
5 years, 6 months ago

Opinion | The budget’s NBFC lifeline needs rework

Live Mint  

After months of dithering and allowing the financial sector, especially non-banking financial companies, to thrash about in deep waters, the government has finally thrown a lifeline to the industry. The logjam acquired crisis proportions when many NBFCs were forced to sell profitable assets to generate cash to repay maturing debts. Initial appeals to both the Reserve Bank of India and …

NBFC Sector Budget 2019: Govt to provide one-time partial credit guarantee to PSBs to buy financially sound NBFC assets
5 years, 6 months ago

NBFC Sector Budget 2019: Govt to provide one-time partial credit guarantee to PSBs to buy financially sound NBFC assets

Firstpost  

The NBFCs are playing an important role in sustaining consumption demand as well as capital formation in small and medium industrial segment, she said in her maiden Budget Speech in Parliament. New Delhi: Non-banking financial companies play an important role in capital formation and the government will provide a one-time partial credit guarantee to PSBs to buy high-rated pooled assets …

NBFC crisis not a solvency issue, says industry body
5 years, 6 months ago

NBFC crisis not a solvency issue, says industry body

Live Mint  

Finance Industry Development Council, the industry body for non-banking financial companies, said the current liquidity crisis is not a solvency issue, but is more of a growth-related problem. At a press conference held on Tuesday, FIDC said that while funds were available at a higher cost, there was a need for a special liquidity window through banking channels, which will …

To solve the liquidity crisis, RBI should make banks lend more to NBFCs
5 years, 6 months ago

To solve the liquidity crisis, RBI should make banks lend more to NBFCs

Hindustan Times  

In the immediate liquidity crisis, good Non-Bank Financial Companies should be able to raise debt capital, but this is not always happening. If the real estate company is itself under financial stress, and does not have the money to complete its project, the assets on the balance sheet of the NBFC start looking bad. Suppose the real estate company needed …

New liquidity requirement for non-banks is credit positive, says Moody’s
5 years, 7 months ago

New liquidity requirement for non-banks is credit positive, says Moody’s

Live Mint  

Mumbai: The Reserve Bank of India guidelines that said liquidity coverage ratio will be applicable to non-banking financial companies from 1 April, 2020 is credit positive for asset-backed securities deals, said a note by Moody's Investors Service on Tuesday. This is credit positive for Indian asset-backed securities deals issued by NBFCs because it will reduce the risk that NBFCs would …

RBI proposes new liquidity norms for NBFCs. How it may impact you
5 years, 7 months ago

RBI proposes new liquidity norms for NBFCs. How it may impact you

Live Mint  

The Reserve Bank of India has issued draft guidelines on liquidity management for the non banking finance companies and proposed a liquidity coverage ratio for large NBFCs covering all deposit-taking NBFCs and non-deposit taking NBFCs with an asset size of ₹5,000 crore and above. Here is a look at what it means and how it will impact you: THE NEW …

RBI draft liquidity norms may put pressure on NBFCs margins and returns over medium term: Analysts
5 years, 7 months ago

RBI draft liquidity norms may put pressure on NBFCs margins and returns over medium term: Analysts

Firstpost  

Last week, the RBI released a draft circular on Liquidity Risk Management Framework for NBFCs with an asset size of Rs 100 crore Mumbai: The draft liquidity norms for the non-banking financial companies announced by the Reserve Bank will put pressure on their margins and returns over the medium term, analysts say. The draft norms said all non-deposit taking NBFCs …

RBI to ensure NBFC liquidity issues do not become systemic; to strengthen risk management systems
5 years, 7 months ago

RBI to ensure NBFC liquidity issues do not become systemic; to strengthen risk management systems

Firstpost  

The RBI board has decided to handle liquidity problems in the NBFC sector in a “nuanced” manner by improving liquidity and tightening regulatory norms without sending a “panic” signal to the market Mumbai/New Delhi: The Reserve Bank of India is concerned about liquidity issues facing some Indian non-banking finance companies such as mortgage or auto lenders and wants to ensure …

Reserve Bank to create specialised cadre for supervision and regulation of banks, NBFCs
5 years, 7 months ago

Reserve Bank to create specialised cadre for supervision and regulation of banks, NBFCs

Firstpost  

This move assumes significance at a time when non-banking financial companies are facing severe liquidity crunch in the wake of IL&FS crisis Chennai: A specialised cadre will be created within the Reserve Bank for supervision and regulation of financial institutions, including banks and NBFCs, the RBI Tuesday said. The decision to create a specialised supervisory and regulatory cadre within the …

Federal Bank to avoid lending to lower-rated NBFCs, says Shyam Srinivasan
5 years, 7 months ago

Federal Bank to avoid lending to lower-rated NBFCs, says Shyam Srinivasan

Live Mint  

Mumbai: Kerala-based private sector lender, Federal Bank is now more cautious than ever on lending to the non-banking financial companies. Following the defaults and liquidity crunch in the sector, the bank has decided not to renew credit lines to low-rated NBFCs, managing director and chief executive officer Shyam Srinivasan said in an interview. To be sure, the bank’s total risk-weighted …

Government has assured it will ease NBFC liquidity norms if re-elected, says IIFL founder Nirmal Jain
5 years, 8 months ago

Government has assured it will ease NBFC liquidity norms if re-elected, says IIFL founder Nirmal Jain

Live Mint  

The government has assured non-banking financial companies that if it retains power in the ongoing parliamentary elections, it will ease liquidity norms for the sector, said Nirmal Jain, founder and chairman, IIFL Holdings Ltd. Jain told reporters on Monday that this has been informally conveyed to them by the government. Jain also said that everyone is waiting for the election …

RBI provides additional 2% liquidity window to banks by tweaking LCR norms
5 years, 9 months ago

RBI provides additional 2% liquidity window to banks by tweaking LCR norms

Firstpost  

Mumbai: In a bid to further improve the cash position of banks, the RBI on Thursday provided additional 2 percent liquidity window to the lenders by tweaking liquidity coverage ratio norms. While this move will harmonise the liquidity requirements of banks with LCR, it will also release additional liquidity for lending by banks,” RBI Governor Shaktikanta Das said after unveiling …

RBI eases norms for bank lending to well-rated NBFCs
5 years, 11 months ago

RBI eases norms for bank lending to well-rated NBFCs

Live Mint  

The RBI today eased norms for maintaining risk weights on bank lending to non-banking finance companies or NBFCs. With a view to facilitating flow of credit to well-rated NBFCs, it has now been decided that rated exposures of banks to all NBFCs, excluding core investment companies, would be risk-weighted as per the ratings assigned by the accredited rating agencies, in …

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