RBI Permits ‘Infrastructure Debt Funds-NBFCs’ to Raise Funds Through Loan Route Under ECBs
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- Last Updated on 19 August, 2023
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Circular No. RBI/2023-24/54 DoR.SIG.FIN.REC.31/03.10.001/2023-24, Dated 18.08.2023
With a view to harmonising the regulations governing the financing of the infrastructure sector by NBFCs, RBI has issued revised guidelines on IDF-NBFCS. As per revised guidelines, the exposure limits for IDF-NBFCs shall be 30% of their Tier 1 capital for a single borrower/party and 50% of their Tier 1 capital for a single group of borrowers/parties. Further, in addition to the bond route, IDF-NBFCs can also raise funds through loan routes under ECBs.
Further, Under the earlier guidelines, an IDF-NBFC was required to be sponsored by a bank or an NBFC-Infrastructure Finance Company (NBFC-IFC). The requirement of a sponsor for an IDF-NBFC has now been withdrawn and shareholders of IDF-NBFCs shall be subjected to scrutiny as applicable to other NBFCs, including NBFC-IFCs.
All other regulatory norms including income recognition, asset classification and provisioning norms as applicable to NBFC-ICCs shall be applicable to IDF-NBFCs.
Click Here To Read The Full Circular
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