Infra finance companies get NBFC status

Infra finance companies get NBFC status
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First Published: Sat, Feb 13 2010. 12 30 AM IST
Updated: Sat, Feb 13 2010. 05 07 PM IST
Mumbai: The Reserve Bank of India or RBI on Friday classified infrastructure finance companies as non banking finance company, the central bank said in a notification. The move comes after a number of NBFCs engaged in infrastructure financing made a representation to the banking regulator seeking a separate category of infrastructure financing NBFCs in view of the critical role played by them in providing credit to the infrastructure sector.
“Currently, the RBI classifies NBFCs under three categories-- asset finance companies, loan companies and investment companies. It has now been decided to introduce a fourth category of NBFCs as infrastructure finance companies (IFCs),’’ RBI said.
To be categorised as an NBFC the IFC should have a networth of about Rs300crore, capital adequacy ratio of 15% and a minimum credit rating of ’A’ or equivalent from accredited rating agencies.
The central bank has also permitted these NBFCs to exceed the concentration of credit norms in lending and investment. According to the RBI guidelines no financial institution can lend in excess of 10% of its net owned funds to any single borrower and in excess of 15% of its net owned funds to any single group of borrowers.
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First Published: Sat, Feb 13 2010. 12 30 AM IST