RBI to accept NBFCs' requests for bad-loan exemptions
By MYBRANDBOOK
The Central Bank of India is unlikely to give "shadow banks" exemptions from stricter bad-loan rules coming into force, essentially ending an advantage the non-bank financial firms have had over standard banks. Non-banking financial companies (NBFCs) have asked the Reserve Bank of India to exempt smaller loans from the rules taking effect next month that are in line with those covering banks.
As of March 2021, India had 10,000 shadow banks, the latest RBI data available, with assets of Rs 54 trillion ($680 billion) or about one-fourth that of the banking sector. Several of the biggest shadow banks are listed on the stock exchanges.
Under the new norms, shadow banks will have to recognise bad loans on a daily basis, rather than monthly, as some now do. Non-performing loans can only be upgraded to performing after borrowers have paid all arrears. Shadow banks wanted loans of up to Rs 2 crore ($250,000) to be exempt, and also asked for some accounting requirements to be relaxed and for an extension to comply with the new rules.
That could boost some institutions' bad loans high enough to subject them to additional regulatory requirements and force them to set aside more cash to provision against non-performing loans, industry executives say.
Shadow banks had also asked the RBI to lower the threshold on bad loans for which they would not need court approval to take control of securities pledged against the loan, manage or sell them to recover dues.
Arguing that their smaller average loan size puts them at a disadvantage to banks, the shadow banks in July sought this permission, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest act, for loans over Rs 1 lakh ($1,250), compared with the current Rs 20 lakh.
BREAKING NEWS
TECHNO TRENDS
Legal Battle Over IT Act Intensifies Amid Musk’s India Plans
The outcome of the legal dispute between X Corp and the Indian government c...
Wipro inks 10-year deal with Phoenix Group's ReAssure UK worth
The agreement, executed through Wipro and its 100% subsidiary,...
Centre announces that DPDP Rules nearing Finalisation by April
The government seeks to refine the rules for robust data protection, ensuri...
Home Ministry cracks down on PoS agents in digital arrest scam
Digital arrest scams are a growing cybercrime where victims are coerced or ...
E-Magazine
TECHNOTAINMENT
Hrithik Roshan to endorse RuPay as Brand Ambassador
RuPay is reportedly planning to feature Bollywood superstar Hrithik Rosha
India Today Group launches – AI Pop Stars
Staying true to our industry leadership position in using cutting-edge tech
MOVERS & SHAKERS
TelioLabs ropes in Phaniraj V A as the Group CEO
TelioLabs has announced the onboarding of Phaniraj V A as its new Group CE
Wipro Appoints Amit Kumar as Managing Partner and Global Head
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology s
OPEN YOUR EYES
INTERVIEWS
Autodesk continually pushing the boundaries in the Design and
Autodesk’s vision is of a better world designed and made for all. It inte
Delivering Critical Business Communication Solutions to Enterp
Arya Omnitalk and Syntel’s comprehensive suite of solutions and more than
HOT PICK
MSI Announces the availability of RTX 50 series of laptops in
MSI, the innovative computing manufacturer in gaming, creator
Nothing Phone (3a) goes on sale today, starting at Rs 19,999
The phone was launched on March 4, featuring a 50MP main, ultra-wide, and t
MAKE IN INDIA BRANDS
EXATRON SERVERS MANUFACTURING PVT. LTD.
DATA SAFEGUARD INDIA PRIVATE LIMITED
VERSA NETWORKS INDIA PVT. LTD.
TATA CONSULTANCY SERVICES
EMINENT CIO'S OF INDIA
ICONS OF INDIA
ICONS OF INDIA : VIJAY SHEKHAR SHARMA
Vijay Shekhar Sharma is an Indian technology entrepreneur and multimil...
Icons Of India : Anil Agarwal
Anil Agarwal, the Founder and Chairman of Vedanta Resources Ltd., is r...
Icons Of India : CP Gurnani
Former Managing Director and CEO of the well-known IT service company ...
PARTNER SPEAKERS
PSU
RailTel Corporation of India Limited
RailTel is a leading telecommunications infrastructure provider in Ind...
IFFCO - Indian Farmers Fertiliser Cooperative
IFFCO operates as a cooperative society owned and controlled by its fa...
LIC - Life Insurance Corporation of India
LIC is the largest state-owned life insurance company in India...
VIDEOS
Top 25 Brands
Global Indian industry
Indian Tech Talent Excelling The Tech World - AJAY BANGA, President - World Bank
Ajay Banga is an Indian-born American business executive who currently...
Indian Tech Talent Excelling The Tech World - JAYASHREE ULLAL, President and CEO - Arista Network
Jayshree V. Ullal is a British-American billionaire businesswoman, ser...
Indian Tech Talent Excelling The Tech World - ARVIND KRISHNA, CEO – IBM
Arvind Krishna, an Indian-American business executive, serves as the C...
ITFORUM 2025
CMO of the Year
WOMEN LEADERSHIP
IMAGE GALLERY
TRENDS IN TECHNOLOGY
MORE VIDEOS
ADVERTISEMENTS
TECHNOLOGY DISRUPTION
UNICORNS REVOLUTIONISING
of images belongs to the respective copyright holders
