Page 59 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) 23062 COPY.indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
nd
th
– NBFCs shall be subject to regulatory to the internal limits on SSE in respect
restrictions in respect of the following: of capital market and commercial real
estate as indicated in para b) above,
 Granting loans and advances to directors, Board of NBFC-UL shall also determine
their relatives and to entities where internal exposure limits on other
directors or their relatives have major
important sectors to which credit is
shareholding.
extended. Further, NBFC-UL shall put in
 Granting loans and advances to Senior place an internal Board approved limit
Officers of the NBFC. for exposure to the NBFC sector.
While appraising loan proposals involving Governance Guidelines -
real estate, NBFCs shall ensure that the Regulatory changes under SBR applicable to
borrowers have obtained prior permission NBFC-BL
from government / local governments / other
statutory authorities for the project, wherever a) Risk Management Committee – In order
required. To ensure that the loan approval that the Board is able to focus on risk
process is not hampered on account of this, management, NBFCs shall constitute a
while the proposals could be sanctioned in Risk Management Committee (RMC)
normal course, the disbursements shall be either at the Board or executive level. The
made only after the borrower has obtained RMC shall be responsible for evaluating
requisite clearances from the government the overall risks faced by the NBFC
authorities. including liquidity risk and will report
to the Board.
A detailed circular on the areas mentioned at
para c above will be issued by the Reserve Bank b) Disclosures - Disclosure requirements
in due course. In the meantime, extant norms shall be expanded, inter alia, to include
shall prevail. types of exposure, related party
transactions, loans to Directors/ Senior
Additional regulatory changes under SBR Officers and customer complaints.
applicable to NBFC-UL
c) Loans to directors, senior offi cers and
d) Large Exposure Framework – It has been relatives of directors - NBFC-BL shall
decided to introduce Large Exposure have a Board approved policy on grant
Framework (LEF) for NBFCs placed of loans to directors, senior officers and
in the Upper Layer. Accordingly, large relatives of directors and to entities
exposure of an NBFC to all counterparties where directors or their relatives have
and groups of connected counterparties major shareholding.
will be considered for exposure ceilings.
Simplified and separate guidelines will A detailed circular on paras (b) & (c) will be
be issued incorporating the definition of issued by the Reserve Bank in due course.
large exposure, regulatory reporting and Regulatory changes under SBR applicable to
large exposure limits.
NBFC-ML and NBFC-UL
e) Internal Exposure Limits - In addition
d) Key Managerial Personnel - Except

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