Page 58 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
th
nd
c) Leverage - In addition to the CRAR, Prudential Guidelines –
NBFC-UL will also be subjected to
Regulatory changes under SBR applicable to
leverage requirement to ensure that NBFC-ML and NBFC-UL
their growth is supported by adequate
capital, among other factors. A suitable a) Concentration of credit/investment - The
ceiling for leverage will be prescribed extant credit concentration limits prescribed for
subsequently for these entities as and NBFCs separately for lending and investments
when necessary. shall be merged into a single exposure limit of
25% for single borrower/ party and 40% for
d) Differentia standard asset single group of borrowers/ parties. Further, the
provisioning- NBFC-UL shall be required
concentration limits shall be determined with
to hold differential provisioning towards reference to the NBFC’s Tier 1 capital instead
different classes of standard assets.
of their Owned Fund. The revised norms are
A detailed circular will be issued by the Bank indicated in the table below
for guidelines at paras b, c, and d above.

Existing limit Revised limit
(as a percentage of Owned Fund) (as a percentage of Tier I Capital)

Lending Investment Total Exposure

Single borrower/ party 15 15 25 Single borrower/ party 25

Single group of borrowers/ Single group of borrowers/
25 25 40 40
parties parties

NBFC-UL shall follow these norms till Large various sectors and their likely impact
Exposure Framework is put in place for them. on business, as evaluated periodically,
Extant instructions on concentration norms should help NBFCs determine such
for different categories of NBFC, other than internal exposure limits. While the Board
the changes indicated above, will continue to is free to determine various sub-limits
remain applicable. within the overall SSE internal limits,
the following are specifically prescribed
b) Sensitive Sector Exposure (SSE)
- A sub-limit within the commercial real
- Exposure to capital market (direct estate exposure ceiling shall be fixed
and indirect) and commercial real
internally for financing land acquisition
estate shall be reckoned as sensitive & Ceiling on IPO Funding as mentioned
exposure for NBFCs. NBFCs shall fix above; Housing Finance Companies shall
Board-approved internal limits for
continue to follow specific regulation on
SSE separately for capital market and sensitive sector exposure
commercial real estate exposures.
Dynamic vulnerability assessments of c) Regulatory restrictions on loans

The Institute Of Cost Accountants Of India

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