What changed
RBI circular DBOD.No.FID.FIC 5/01.02.00/2008-09 dated February 26, 2009 applies the restructuring guidelines issued to banks (via circulars from August 27, 2008, December 8, 2008, and January 2, 2009) mutatis mutandis to select all-India Financial Institutions. Exceptions are made for activities not usually undertaken by FIs, such as working capital, overdrafts, and personal loans.
What it means for you
FIs like Exim Bank, NABARD, NHB, and SIDBI must now follow the same restructuring norms as banks for their advance portfolios, ensuring consistency in prudential treatment. The exclusion of working capital and personal loan provisions means FIs can focus on term lending and refinancing without adapting those specific rules.
What you must do
- Review and align your restructuring policies with the bank guidelines referenced in the circular.
- Identify and exclude provisions related to working capital, overdrafts, and personal loans from your implementation.
- Ensure acknowledgment of receipt of this circular as required by RBI.
- Train relevant staff on the new restructuring framework applicable to FIs.
Who it affects
Exim Bank, NABARD, NHB, SIDBI, All-India Financial Institutions covered by the circular
Which specific RBI circulars are being extended to FIs?
The circulars dated August 27, 2008, December 8, 2008, and January 2, 2009, which originally applied to banks, are now applicable to select FIs.
Are there any exemptions for FIs under this circular?
Yes, provisions related to working capital, overdrafts, and personal loans are not applicable to FIs, as these activities are generally not undertaken by them.
What is the effective date of this circular?
The circular is dated February 26, 2009, and is effective immediately upon receipt.