What changed
RBI extended the timeline for systemically important non-deposit taking NBFCs to meet the higher CRAR of 12% and 15%. The earlier deadline of March 31, 2009 for 12% and March 31, 2010 for 15% has been pushed back by one year each, to March 31, 2010 and March 31, 2011 respectively.
What it means for you
NBFCs-ND-SI get breathing room to raise capital amid tight market conditions. The deferral signals RBI's sensitivity to market realities while maintaining the eventual higher capital requirement.
What you must do
- Update internal compliance calendars for NBFC-ND-SI clients to reflect the new CRAR deadlines.
- Advise NBFC-ND-SI clients to use the extra time to plan equity raising strategies.
- Acknowledge receipt of this circular to the respective Regional Office of DNBS.
Who it affects
All non-deposit taking NBFCs with asset size of Rs. 100 crore and above (NBFCs-ND-SI)
What is the new deadline for NBFCs-ND-SI to achieve 12% CRAR?
The deadline has been extended from March 31, 2009 to March 31, 2010.
Why did RBI defer the CRAR hike?
RBI cited the difficulty in raising equity capital in the current economic environment as the reason for the deferment.
Does this circular apply to all NBFCs?
No, it applies only to non-deposit taking NBFCs with asset size of ₹100 crore and above (systemically important NBFCs-ND-SI).