Professional Documents
Culture Documents
Regulations 2007
NBFC
Rules,
2003 Establishment of NBFC
Transition from 2003 Framework
Under
section
282 A (a)
Same
license
Investment
Investment Housing Asset Discounting
Leasing Finance Management Services
Advisory VCI
Finance Services
New!
Administrator
Liquid Net worth
Net capital
Risk Assets
Small Entrepreneurs
Terms Defined
Thefollowing terms are now defined in the
2003 regulations:
Brokerage business
Discounting services
Major shareholder
Promoter / sponsor
Regulations
Expanded Terms
Asset management services extended to collective investment
schemes
Connected persons include:
The managing NBFC to the Collective investment scheme
The trustee/custodian to the collective inv scheme
Custodian now includes
Trust Co that is subsidiary of Banking Co
NBFC engaged in IFS & approved by SEC
Other Co. approved by SEC
Expanded Terms contd.
Equity now includes
subordinated loans
Redeemable preference shares
Less: accumulated losses
Conditions of:
Minimum tiers of capital, 25% capital allotted to
promoters, Promoters / directors to hold shares
in blocked CDC a/c,
Important amendments contd.
RULE TITLE AMMENDMENT
IAS 50 30 35 40 50
VCI - 50 - - -
Aggregate & Contingent
Liabilities (All NBFCs)
10
9
8
7
6
5 AL
4 CL
3
2
1
0
YR 1 YR 2 YR 3 YR 4 YR ~
Leasing
IFS
HFS
Other
Exposure Limits
100%
90%
80%
70%
60%
Clean
50%
Funded
40%
Total
30%
20%
10%
0%
Single Group Aggregate
Borrower’s:
total exposure< 10 X equity of borrower
Current ratio 1:1 (may be relaxed to 0.75:1)
New Provisioning
Time based Classification into:
Substandard(90 days),
doubtful(180 days); and
Loss (1 yr, TBs 180 days, Credit Card 180 days)
Provisioning @ 25%, 50% & 100%
No provisioning for Govt. guaranteed exposure
Additional subjective evaluation
Declassification of rescheduled loans
FSV ( other than realizable assets)
In case of leasing & IFS:
Discounted for yr 1, 2 & thereafter as 80%, 70% & 50%
Revaluation every 3 years by independent valuer
In case of HFS
Discounting @ 70%
Revaluation every 10 years by independent valuer
Types of charges
Quarterly credit review by NBFCs, annual by Auditors
Reversal of provision Cash receipt> 20%, 50%, 100% of NPL)
Quarterly list of delinquent / rescheduled accounts to SEC
(I) Leasing
An NBFC engaged in Leasing shall meet the following conditions:
Investment in shares
Of one company < 10% equity of NBFC/Co
AMC
Investment
Fund manager
Committee
trustee
trustee trustee Sharia
DESCRIPTION BY TO AMOUNT
AMC CIS AMC 5yrs: 3% of Avg. annual
remuneration net assets of CIS
Afterwards, 2%