Liberalizing borrowing norms for infrastructure

By Shardul Thacker, Mulla & Mulla & Craigie Blunt & Caroe

The Reserve Bank of India (RBI) classifies non-banking financial companies (NBFC) into three categories: asset finance companies, loan companies and investment companies. All three types of NBFC are expected to maintain a minimum capital adequacy ratio of 12%.

New category

In light of the predominant role played by infrastructure financing NBFCs in recent times, in making available lines of credit to the infrastructure sector, a need has emerged for a separate class of infrastructure financing NBFCs.

The RBI, having accepted the need for a separate category of infrastructure financing NBFCs, has in a notification dated 12 February amended the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

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Shardul Thacker is a partner with Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.


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