RBI caps lending limits of NBFCs

The Reserve Bank of India (RBI) has tightened the rules for non-banking finance companies (NBFCs) relating to their large exposures.

The exposure of NBFCs for the Upper layer: Exposure must not exceed 20% of its capital base at all times, Board can allow an additional 5%. NBFCs that are into infrastructure finance can have exposure of 25%, with an option of an additional 5% of Tier I capital to a single counterparty. Norms will come into effect from October 1, 2022.