RBI imposes stricter lending and disclosure guidelines for NBFCs

Mumbai, April 20 (KNN) The Reserve Bank of India (RBI) has imposed stricter lending and disclosure rules on non-banking finance companies (NBFCs) which doesn’t allow them to lend credit to businesses that their senior executives and directors are interested in.

The central bank has also directed the NBFCs to disclose exposure to all sensitive sectors, including real estate, loans against shares and securitised mortgages.

It has set a lending limit of Rs 5 crore to directors, CEO or relatives of directors through mid-layer and upper layer NBFCs.

However this new restrictions is not applicable in case the lending is sanctioned by the board.

They also cannot lend to any firm in which any of their directors or their relatives are interested as a partner, manager, employee or guarantor. 

Under RBI’s scale-based regulations, upper layer NBFCs are the top 10 companies and those identified by the centra bank. 

All other NBFCs with assets over Rs 1,000 crore form the mid-layer, and the smaller ones comprise the base layer. (KNN Bureau)