RBI states no to unique direct exposure relaxations for state NBFCs
By ET BureauLast Updated: Jun 25, 2026, 01:23:00 AM IST
Summary
The Reserve Bank of India has actually securely turned down ask for unique exemptions from concentration standards for government-owned NBFCs, stressing a principles-based regulative method. The reserve bank likewise rejected calls to raise single counterparty limitations for public sector business. While enabling grandfathering of recurring breaches and particular conditions for short-term limitation breaches, the RBI has actually tightened up guidelines to guarantee regulative clearness and stability.
Listen to this short article in summed up format
Mumbai: The Reserve Bank of India(RBI)has actually turned down calls by stakeholders to continue case-specific exemptions from concentration standards for government-owned NBFCs, stating that doing so breaks a principles-based structure and develops preventable regulative unpredictability. In modified instructions released Wednesday, the reserve bank likewise declined ask for a boost in single counterparty limitations for direct exposures to public sector business.
“While a case-by-case exemption was permitted earlier, most of such exemptions had a sunset clause which has since expired, and the exposure of these entities have been brought within limits,” the RBI stated.
Check out: RBI tightens up guidelines on healing of excess pension payments
The RBI has, nevertheless, permitted any recurring breaches under the modified concentration standards to be grandfathered. “Further, such exposures can be offset by using eligible credit risk transfer instruments such as state government guarantees,” it stated.
The RBI has actually permitted government-owned NBFCs to breach their single and group direct exposure restricts offered these are run up until maturity which net incremental direct exposure stays the same.
In changed instructions, the RBI likewise increased the big direct exposure limitation for facilities financing business (IFCs) in the upper layer to 45% from 35% of the capital base.
< meta material ="cms.article3" name ="cmsei-article3">
