The Reserve Bank of India (RBI) on January 15, 2024, issued Credit/Investment Concentration Norms – Credit Risk Transfer.
The guidelines on the Large Exposures Framework (LEF) apply to the NBFC-Upper Layer (NBFC-UL) in terms of paragraph 110 of the MD on NBFC. The NBFC-Base Layer (NBFC-BL) and NBFC-Middle Layer (NBFC-ML) are, however, governed by the credit/investment concentration norms prescribed in paragraphs 32 and 91 of the MD on NBFC, paragraph 20 of MD on HFC and circular on Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs dated October 22, 2021. To ensure uniformity and consistency in the computation of concentration norms among NBFCs, a review of the extant concentration norms has been carried out and it has been decided.
Regulations for NBFC-ML
•Computation of exposure – Credit Risk Transfer Instruments
•Exemptions from credit/investment concentration norms
•Regulations for NBFC-BL
• Regulations for NBFC-UL
[Notification No. RBI/2023-24/112DOR.CRE.REC.70/21.01.003/2023-24]
