Corporate Updates 29.08.2016

RBI

RBI has issued Master Directions for Non-Banking Financial Companies on six subjects. The subjects on which Master Directions have been issued are Exemptions from the provisions of RBI Act, 1934, Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, Core Investment Companies (Reserve Bank) Directions, 2016, Standalone Primary Dealers (Reserve Bank) Directions, 2016, Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 2016, Residuary Non-Banking Companies (Reserve Bank) Directions, 2016. These directions consolidate/reorganise instructions issued in various Circulars/Directions/ Notifications/Master Circulars. The six Master Directions replace instructions contained in existing Master Circulars. RBI further informed that Master Directions on other subjects will be released shortly through a separate notification.

 

RBI

RBI vide Notification prescribes norms for enhancing credit to large borrowers. In order to mitigate the risk of high exposure of banking system to any single borrower, RBI notified the prudential norms on enhancing credit supply to large borrowers through market mechanism.  As per the norms, which will come into effect from April 1, 2017, incremental exposure of banking system to a specified borrower beyond normally permitted lending limit (NPLL) will be deemed to carry higher risk which will be recognised by way of additional provisioning and higher risk weights. Specified borrower shall mean a borrower with an aggregate of the fund-based credit limits (ASCL) of more than Rs 25,000 crore at any time during 2017-18, Rs 15,000 crore at any time during 2018-19 and Rs 10,000 crore at any time from April 1, 2019, onwards. The final guidelines have been prepared after receiving the comments on the Discussion Paper that proposed a framework for addressing the concentration risk of the banking system arising from its exposures towards a single counter party.