Provision of 0.25% for standard assets of NBFCs - ਆਰਬੀਆਈ - Reserve Bank of India
Provision of 0.25% for standard assets of NBFCs
RBI/2010-11/370 January 17, 2011 All NBFCs Dear sir, Provision of 0.25% for standard assets of NBFCs In terms of Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, and Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, all NBFCs are required to make necessary provisions for non performing assets. In the interests of counter cyclicality and so as to ensure that NBFCs create a financial buffer to protect them from the effect of economic downturns, it has been decided to introduce provisioning for standard assets also. 2. Accordingly
3. Accompanying Notifications No. DNBS. 222 CGM(US)2011 and No. DNBS. 223 CGM (US) 2011 both dated January 17, 2011 are enclosed for meticulous compliance. Yours sincerely, (Uma Subramaniam) Encl: as above RESERVE BANK OF INDIA Notification No. DNBS.222/ CGM(US)-2011 dated January 17, 2011 The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 contained in Notification No. DNBS. 192/DG(VL)-2007 dated February 22, 2007 in exercise of the powers conferred by section 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said directions shall be amended with immediate effect as follows, namely - i) The following paragraph may be added after Para 9 of the directions as Para 9A.
ii) The para (2)(xx)(c) of the above Directions may be modified to read as follows: "General Provisions (including that for standard assets) and loss reserves to the extent these are not attributable to actual diminution in value or identifiable potential loss in any specific asset and are available to meet unexpected losses, to the extent of one and one fourth percent of risk weighted assets;" (Uma Subramaniam) RESERVE BANK OF INDIA Notification No. DNBS.223/ CGM(US)-2011 dated January 17, 2011 The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 contained in Notification No. DNBS. 193/DG(VL)-2007 dated February 22, 2007 in exercise of the powers conferred by section 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said directions shall be amended with immediate effect as follows, namely -
(Uma Subramaniam) |