What changed
RBI issued a master circular consolidating all instructions issued during the year ended June 30, 2012, exclusively for NBFC-ND-SI. This includes the regulatory framework for systemically important NBFCs, capital adequacy ratios, exposure norms, and other miscellaneous instructions. The circular does not introduce new rules but compiles existing ones for easier reference.
What it means for you
NBFC-ND-SI must continue to maintain a minimum CRAR of 12% (with past requirement of 15% as of March 31, 2011) and adhere to single/group exposure norms. The consolidation simplifies compliance by providing a single reference document. Banks with exposure to NBFC-ND-SI should note the asset size threshold of ₹100 crore for systemic importance classification.
What you must do
- Review the consolidated master circular to ensure your NBFC-ND-SI complies with all current instructions.
- Verify that your NBFC-ND-SI maintains the required CRAR of 12% (note: past requirement was 15% as of March 31, 2011).
- Update internal policies to align with single/group exposure norms for NBFC-ND-SI.
- Check if your NBFC-ND-SI has an asset size of ₹100 crore or more to confirm systemic importance status.
Who it affects
All Non-Banking Financial Companies (NBFCs), Systemically Important Non-Deposit Taking NBFCs (NBFC-ND-SI), Asset Finance Companies (AFCs), Banks with relationships with NBFC-ND-SI
What is the asset size threshold for an NBFC-ND to be considered systemically important?
An NBFC-ND with an asset size of ₹100 crore or more as per the last audited balance sheet is considered systemically important (NBFC-ND-SI).
What is the minimum CRAR requirement for NBFC-ND-SI?
NBFC-ND-SI must maintain a minimum Capital to Risk-weighted Assets Ratio (CRAR) of 12% (changed from 10% to 12% as of March 31, 2010, and to 15% as of March 31, 2011). Deposit-taking NBFCs continue to have a minimum CRAR of 12% or 15% as applicable.
Does this circular introduce new regulations?
No, this circular consolidates all existing instructions issued during the year ended June 30, 2012, into a single master circular for NBFC-ND-SI. It does not introduce new rules.