RBI/2018-19/126
DBR.BP.BC.No.25/21.06.001/2018-19
February
22, 2019
All Scheduled Commercial Banks
(Excluding Regional Rural Banks),
Small Finance Banks
Dear Sir / Madam,
Risk Weights for exposures to
NBFCs
Please refer to para 5.8 and
para 5.13.5 of the Master Circular on Basel
III Capital Regulation dated July 1, 2015. At present claims on
rated as well as unrated Non-deposit Taking Systemically Important
Non-Banking Financial Companies (NBFC-ND-SI), other than Asset Finance
Companies (AFCs), Non-Banking Financial Companies – Infrastructure Finance
Companies (NBFCs-IFC), and Non-banking Financial Companies – Infrastructure
Development Funds (NBFCs-IDF), have to be uniformly risk weighted at 100%.
Exposures to AFCs, NBFCs – IFC, NBFCs – IDF and other NBFCs which are not
NBFC-ND-SI, are risk weighted as per the ratings assigned by the rating
agencies accredited by the Reserve Bank of India.
2. As indicated in the Statement on Developmental and Regulatory Policies dated
February 07, 2019, it has been decided that exposures to all NBFCs,
excluding Core Investment Companies (CICs), will be risk weighted as per
the ratings assigned by the rating agencies registered with SEBI and
accredited by the Reserve Bank of India, in a manner similar to that of
corporates as prescribed under para 5.8.1 of the Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated
July 1, 2015 on Basel III Capital Regulations read with Circular DBR.No.BP.BC.6/21.06.001/2016-17 dated August
25, 2016 on “Review of Prudential Norms –Risk Weights for
Exposures to Corporates, AFCs and NBFC-IFCs” and Mailbox Clarification
dated December 29, 2017. Exposures to CICs, rated as well as unrated, will
continue to be risk-weighted at 100%.
Yours faithfully,
(Saurav Sinha)
Chief General Manager-in-Charge
Extract
from Statement on Developmental and Regulatory Policies dated February 07,
2019
4. Risk Weights for rated
exposures to Non-Banking Financial Companies (NBFCs)
Under extant guidelines on Basel
III Capital Regulations, exposures/claims of banks on rated as well as
unrated Non-deposit Taking Systemically Important Non-Banking Financial
Companies (NBFC-ND-SIs), other than Asset Finance Companies (AFCs),
Non-Banking Financial Companies – Infrastructure Finance Companies
(NBFCs-IFC) and Non-Banking Financial Companies – Infrastructure
Development Fund (NBFCs-IDF), have to be uniformly risk-weighted at 100%.
With a view to facilitating flow of credit to well-rated NBFCs, it has now
been decided that rated exposures of banks to all NBFCs, excluding Core
Investment Companies (CICs), would be risk-weighted as per the ratings
assigned by the accredited rating agencies, in a manner similar to that for
corporates. Exposures to CICs will continue to be risk-weighted at 100%. Guidelines
in this regard will be issued by the end of February 2019.
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