RBI/2017-18/181
DNBR (PD) CC.No.092/03.10.001/2017-18
May 31, 2018
All Government NBFCs
Madam/ Sir,
Withdrawal of Exemptions Granted to Government Owned NBFCs
Government owned companies, as defined under Clause (45) of Section 2 of the Companies Act, 2013 (Section 617 of the Companies Act, 1956) and registered with the Reserve Bank of India as NBFCs, are currently exempt from following regulatory and statutory provisions:
(i) Sections 45-IB and 45-IC of the RBI Act, 1934.
(ii) Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Master Direction - Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 (except provisions contained in paragraph 23 of these Directions).
(iii) Master Direction - Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 (except provisions contained in paragraph 36, 37 and 41 of these Directions).
2. On a review, it has been decided to make the NBFC regulations applicable to Government NBFCs as per the timeline indicated in the Annex to this circular. Government NBFCs that are already complying with the prudential regulation as per the road map submitted by them shall continue to follow the same.
3. Master Directions on Exemptions from the provisions of RBI Act, 1934, Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016, Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, have been updated accordingly.
4. Necessary notification withdrawing the exemption under section 45 NC of the RBI Act, 1934 shall be issued separately.
Yours faithfully
(Manoranjan Mishra)
Chief General Manager
Annex
Timeline for Government NBFCs
| Norm |
Extant Provisions for other NBFCs |
Govt. NBFCs Timeline |
| Prudential Regulation |
| Income recognition |
As prescribed |
Balance Sheet dated March 31, 2019 |
| Asset Classification |
NBFC-NDSI and
NBFCs-D – 90 days norm
NBFCs-ND – 180 days norm |
NBFC-NDSI and NBFCs-D
120 days – March 31, 2019
90 days – March 31, 2020
NBFCs-ND
180 day norm – March 31, 2019 |
| Provisioning requirement |
For NPAs – As specified in the Directions. |
As on March 31, 2019– 100% of prescribed requirement |
For Standard Assets
NBFC-NDSI and NBFCs-D- 0.40%
NBFCs-ND – 0.25% |
Capital Adequacy
Applicable to NDSI and NBFC –D |
CRAR – 15%
Tier 1 – 10% |
| 10% (min Tier I – 7%; |
March 31, 2019 |
| 12% (min Tier I – 8%) |
March 31, 2020 |
| 13% (min Tier I – 9%) |
March 31, 2021 |
| 15% (min Tier I – 10%) |
March 31, 2022 |
|
| Leverage Ratio |
Applicable to NBFC –ND |
A roadmap for adherence by March 31, 2022 to be prepared by the Govt. NBFC - ND |
| Concentration of credit/ investment |
As prescribed |
Govt. companies set up to serve specific sectors may approach the Reserve Bank for exemptions, if any. For others, the timeline will be up to balance Sheet dated March 31, 2022. |
| Others |
| Corporate Governance etc. |
As prescribed |
Balance Sheet dated March 31, 2019 |
| Conduct of Business Regulations (Fair Practices Code) |
As prescribed |
Balance Sheet dated March 31, 2019 |
| Acceptance of Deposit Directions |
| Deposit Directions |
As prescribed for NBFC-D |
• Investment Grade Credit rating for acceptance of public deposits- March 31, 2019.
• A Govt. NBFC-D having investment grade credit rating can accept deposits only upto 1.5 times of its NOF. Govt. NBFCs holding deposits in excess of the limit shall not access fresh deposits or renew existing ones till they conform to the limit, the existing deposits will be allowed to run off till maturity.
• All other directions shall apply from Balance Sheet dated March 31, 2019. |
| Statutory Provisions |
| Sec 45 IB |
Maintenance of percentage of assets – 15% of the outstanding deposits |
March 31, 2019 – 5% of outstanding deposits
March 31, 2020 – 10% of outstanding deposits
March 31, 2021 – 12% of outstanding deposits
March 31, 2022 – 15% of outstanding deposits |
| Sec 45 IC |
Reserve Fund |
March 31, 2019 |
|
