BID TO EASE STRESS ON NBFCs

BE/RBI NOTE/51/2018

1. Indian NBFCs which are known as Shadow banks are facing stress on their Balance Sheets after a debt crisis brought a huge hit in NBFCs working in September this year, which in turn brought fears in the minds of investors.
2. This has otherwise resulted in a cash crunch in the sector.

SOME GOOD NES FOR NBFCs FROM RBI

In order to tide over the problem and to bring some relief to NBFCs and also to provide additional liquidity to banks and enhancement of credit for refinancing sectors, RBI has now come forward with the above decision

1. RBI has permitted NBFCs to sell or securitize their assets which could ease their stress
2. After holding the assets for a period of six months in their books (which was one year earlier), NBFCs can now securitize loans which are more than 5 years old.
3. The relaxation on the minimum holding period will be allowed when the NBFCs retain 20% of the book value of these loans.