MANU/RMIC/0101/2020

Ministry : Reserve Bank of India

Department/Board : Department of Regulation

Circular No. : DoR(NBFC)(PD)CC.No.113/03.10.001/2020-2021
                   RBI/2020-2021/01

Date : 01.07.2020

All NBFCs/HFCs

Madam/Dear Sir,

Special liquidity scheme for NBFCs/HFCs

The Government of India has approved a scheme to improve the liquidity position of NBFCs/HFCs through a Special Purpose Vehicle (SPV) to avoid any potential systemic risks to the financial sector. To be eligible under the Scheme, the following conditions should be met:

a. NBFCs including Microfinance Institutions that are registered with the RBI under the Reserve Bank of India Act, 1934, excluding those registered as Core Investment Companies;

b. Housing Finance Companies that are registered under the National Housing Bank Act, 1987;

c. CRAR/CAR of NBFCs/HFCs should not be below the regulatory minimum, i.e., 15% and 12% respectively as on March 31, 2019;

d. The net non-performing assets should not be more than 6% as on March 31, 2019;

e. They should have made net profit in at least one of the last two preceding financial years (i.e. 2017-18 and 2018-19);

f. They should not have been reported under SMA-1 or SMA-2 category by any bank for their borrowings during last one year prior to August 01, 2018;

g. They should be rated investment grade by a SEBI registered rating agency;

h. They should comply with the requirement of the SPV for an appropriate level of collateral from the entity, which, however, would be optional and to be decided by the SPV.