Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT Audit :: ACCOUNTING STANDARD :: form 3cd :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: due date for vat payment :: empanelment :: articles on VAT and GST in India
 
 
« Latest Circulars »
 RBI announces auction of a 80-Day Government of India Cash Management Bill
  RBI-Auction for Sale (Re-issue) of Government of India Floating Rate Bonds 2024
  RBI releases Handbook of Statistics on Indian States 2016-17
  RBI amends Banking Ombudsman Scheme: Includes Complaints relating to Misselling and Mobile/ Electronic Banking
 RBI releases Handbook of Statistics on Indian States 2016-17
 RBI amends Banking Ombudsman Scheme: Includes Complaints relating to Misselling and Mobile/ Electronic Banking
 Recording of Details of Transactions in Passbook/ Statement of Account
 Exclusion of β€œThe Royal Bank of Scotland N.V.” from the Second Schedule to the Reserve Bank of India Act, 1934
 Monitoring of Foreign Investment under PIS in Indian Companies- Removal from Ban List - FIIs/RPIs : M/s IDFC Limited
 FIIs/FPIs can now invest 24 to 49 per cent under PIS in M/s Satin Creditcare Network Limited
  Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)

RBI-Review of Guidelines on Restructuring of Advances by NBFCs
January, 17th 2015

RBI/2014-15/410
DNBR.CO.PD.No.011/03.10.01/2014-15

January 16, 2015

All NBFCs excluding Primary Dealers

Dear Sirs,

Review of Guidelines on Restructuring of Advances by NBFCs

Please refer to circular DNBS.CO.PD.No.367/03.10.01/2013-14, dated January 23, 2014, on the captioned subject.

2. In terms of extant instructions contained in the above mentioned circulars, revisions of the date of commencement of commercial operations (DCCO) and consequential shift in repayment schedule for equal or shorter duration (including the start date and end date of revised repayment schedule) will not be treated as restructuring provided that:

  1. The revised DCCO falls within the period of two years and one year from the original DCCO stipulated at the time of financial closure for infrastructure projects and non-infrastructure projects respectively; and

  2. All other terms and conditions of the loan remain unchanged.

3. Further, NBFCs may restructure such loans, subject to the extant prudential norms on restructuring of advances, by way of revision of DCCO beyond the time limits quoted at paragraph 2(a) above and retain the ‘standard’ asset classification, if the fresh DCCO is fixed within the following limits, and the account continues to be serviced as per the restructured terms:

(a) Infrastructure Projects involving court cases

Up to another two years (beyond the two year period quoted at paragraph 2(a) above, i.e., total extension of four years), in case the reason for extension of DCCO is arbitration proceedings or a court case.

(b) Infrastructure Projects delayed for other reasons beyond the control of promoters

Up to another one year (beyond the two year period quoted at paragraph 2(a) above, i.e., total extension of three years), in case the reason for extension of DCCO is beyond the control of promoters (other than court cases).

(c) Project Loans for Non-Infrastructure Sector (Other than Commercial Real Estate Exposures)

Up to another one year (beyond the one year period quoted at paragraph 2(a) above, i.e., total extension of two years).

4. In this connection, it is clarified that multiple revisions of the DCCO and consequential shift in repayment schedule for equal or shorter duration (including the start date and end date of revised repayment schedule) will be treated as a single event of restructuring provided that the revised DCCO is fixed within the respective time limits quoted at paragraph 3 (a) to (c) above and all other terms and conditions of the loan remained unchanged.

5. It may be further clarified that, if deemed fit, NBFCs may extend DCCO beyond the respective time limits quoted at paragraph 3 (a) to (c) above; however, in that case, NBFCs will not be able to retain the ‘standard’ asset classification status of such loan accounts.

6. Internationally, project finance lenders sanction a ‘standby credit facility’ to fund cost overruns if needed. Such ‘standby credit facilities’ are sanctioned at the time of initial financial closure; but disbursed only when there is a cost overrun. At the time of credit assessment of borrowers/project, such cost overruns are also taken into account while determining the project Debt Equity Ratio, Debt Service Coverage Ratio, Fixed Asset Coverage Ratio etc. Such ‘standby credit facilities’ rank pari passu with base project loans and their repayment schedule is also the same as that of the base project loans.

7. Accordingly, in cases where NBFCs have specifically sanctioned a ‘standby facility’ at the time of initial financial closure to fund cost overruns, they may fund cost overruns as per the agreed terms and conditions.

In cases where the initial financial closure does not envisage such financing of cost overruns, NBFCs have been allowed to fund cost overruns, which may arise on account of extension of DCCO within the time limits quoted in the above, without treating the loans as ‘restructured asset’ subject to the following conditions:

  1. NBFCs may fund additional ‘Interest During Construction’, which may arise on account of delay in completion of a project;

  2. Other cost overruns (excluding Interest During Construction) up to a maximum of 10% of the original project cost. This ceiling is applicable to financing of all other cost overruns (excluding interest during construction), including cost overruns on account of fluctuations in the value of Indian Rupee against other currencies, arising out of extension of date of commencement of commercial operations;

  3. The Debt Equity Ratio as agreed at the time of initial financial closure should remain unchanged subsequent to funding cost overruns or improve in favour of the lenders and the revised Debt Service Coverage Ratio should be acceptable to the lenders;

  4. Disbursement of funds for cost overruns should start only after the Sponsors/Promoters bring in their share of funding of the cost overruns; and

  5. All other terms and conditions of the loan should remain unchanged or enhanced in favour of the lenders.

8. Notifications amending Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 and Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 are enclosed for meticulous compliance. 

Yours faithfully,

 

(A. Mangalagiri)
General Manager- in-Charge


NOTIFICATION No.DNBR(PD).001/GM(AM)-2015 dated January 16, 2015

The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (hereinafter referred to as the said Directions) contained in Notification No.DNBS.192/DG(VL)-2007 dated February 22, 2007, in exercise of the powers conferred by section 45JAof the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said Directions shall be amended with immediate effect as follows -

2. The following point (v)(a) shall be inserted after point (v) of sub-para3.3 of Paragraph 3 and as point (iv)(a) after point (iv) of sub-para 3.4 of Paragraph 3 of the Guidelines provided in the Annex-A to the aforementioned notification –

Multiple revisions of the DCCO and consequential shift in repayment schedule for equal or shorter duration (including the start date and end date of revised repayment schedule) will be treated as a single event of restructuring provided that the revised DCCO is fixed within the respective time limits as stated in above points and all other terms and conditions of the loan remained unchanged.

If deemed fit, NBFCs may extend DCCO beyond the respective time limits quoted at (iii)(a) to (b) above; however, in that case, NBFCs will not be able to retain the ‘standard’ asset classification status of such loan accounts.

3. The following point (v)(b) shall be inserted after point (v)(a) of sub-para3.3 of Paragraph 3 and as point (iv)(b) after point (iv)(a) of sub-para 3.4 of Paragraph 3 of the Guidelines provided in the Annex-A to the aforementioned notification –

In cases where NBFCs have specifically sanctioned a ‘standby facility’ at the time of initial financial closure to fund cost overruns, they may fund cost overruns as per the agreed terms and conditions.

In cases where the initial financial closure does not envisage such financing of cost overruns, NBFCs have been allowed to fund cost overruns, which may arise on account of extension of DCCO within the time limits quoted at (iii)(a) to (b) above, without treating the loans as ‘restructured asset’ subject to the following conditions:

  1. NBFCs may fund additional ‘Interest During Construction’, which may arise on account of delay in completion of a project;

  2. Other cost overruns (excluding Interest During Construction) up to a maximum of 10% of the original project cost. This ceiling is applicable to financing of all other cost overruns (excluding interest during construction), including cost overruns on account of fluctuations in the value of Indian Rupee against other currencies, arising out of extension of date of commencement of commercial operations;

  3. The Debt Equity Ratio as agreed at the time of initial financial closure should remain unchanged subsequent to funding cost overruns or improve in favour of the lenders and the revised Debt Service Coverage Ratio should be acceptable to the lenders;

  4. Disbursement of funds for cost overruns should start only after the Sponsors/Promoters bring in their share of funding of the cost overruns; and

  5. All other terms and conditions of the loan should remain unchanged or enhanced in favour of the lenders.

 

(A. Mangalagiri)
General Manager-in-Charge


NOTIFICATION No.DNBR(PD).002/GM (AM)-2015 dated January 16, 2015

The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (hereinafter referred to as the said Directions) contained in Notification No.DNBS.193/DG(VL)-2007dated February 22, 2007, in exercise of the powers conferred by section 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said Directions shall be amended with immediate effect as follows –

2. The following point (v)(a) shall be inserted after point (v) of sub-para3.3 of Paragraph 3 and as point (iv)(a) after point (iv) of sub-para 3.4 of Paragraph 3 of the Guidelines provided in the Annex-IV to the aforementioned notification –

Multiple revisions of the DCCO and consequential shift in repayment schedule for equal or shorter duration (including the start date and end date of revised repayment schedule) will be treated as a single event of restructuring provided that the revised DCCO is fixed within the respective time limits as stated in above points and all other terms and conditions of the loan remained unchanged.

If deemed fit, NBFCs may extend DCCO beyond the respective time limits quoted at (iii)(a) to (b) above; however, in that case, NBFCs will not be able to retain the ‘standard’ asset classification status of such loan accounts.

3. The following point (v)(b) shall be inserted after point (v)(a) of sub-para3.3 of Paragraph 3 and as point (iv)(b) after point (iv)(a) of sub-para 3.4 of Paragraph 3 of the Guidelines provided in the Annex-IV to the aforementioned notification –

In cases where NBFCs have specifically sanctioned a ‘standby facility’ at the time of initial financial closure to fund cost overruns, they may fund cost overruns as per the agreed terms and conditions.

In cases where the initial financial closure does not envisage such financing of cost overruns, NBFCs have been allowed to fund cost overruns, which may arise on account of extension of DCCO within the time limits quoted at (iii)(a) to (b) above, without treating the loans as ‘restructured asset’ subject to the following conditions:

  1. NBFCs may fund additional ‘Interest During Construction’, which may arise on account of delay in completion of a project;
  2. Other cost overruns (excluding Interest During Construction) up to a maximum of 10% of the original project cost. This ceiling is applicable to financing of all other cost overruns (excluding interest during construction), including cost overruns on account of fluctuations in the value of Indian Rupee against other currencies, arising out of extension of date of commencement of commercial operations;

  3. The Debt Equity Ratio as agreed at the time of initial financial closure should remain unchanged subsequent to funding cost overruns or improve in favour of the lenders and the revised Debt Service Coverage Ratio should be acceptable to the lenders;

  4. Disbursement of funds for cost overruns should start only after the Sponsors/Promoters bring in their share of funding of the cost overruns; and

  5. All other terms and conditions of the loan should remain unchanged or enhanced in favour of the lenders.

 

(A. Mangalagiri)
 General Manager-in-Charge

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions