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RBI Changes Rules For NBFC Loan Approval
It was said by RBI that NBFCs should not give loans of 5 crores or more to their chairman, MD or their relatives and directors. Apart from this, approval will be given for any builder project only when all necessary approvals are received from the government
Photo Credit :
RBI
The Reserve Bank of India (RBI) has tightened the rules for non-banking financial services companies (NBFCs). RBI asked NBFCs to give loans for the real estate sector only after they have got all the approvals related to the project. It was said by RBI that NBFCs will also have to take approval before approval of loan in some cases.
It was said by RBI that NBFCs should not give loans of Rs 5 crore or more to their chairman, MD or their relatives and directors. Apart from this, if the director of NBFC is a partner in any firm, then strictness will be applicable to him also. All the rules changed will be effective from 1 October 2022.
In the changes made, it was said that if the loan will be given by the NBFC to its senior officers, then the board will have to be informed about this first. Loan approval for any builder project will be available only when the project has got all the necessary approvals. Small NBFCs will have to get a board approved policy for lending to directors.
Basic level NBFCs do not accept deposits and have assets less than Rs 1,000 crore. On the other hand, mid-level non-banking financial companies also do not accept deposits, but their asset size is Rs 1,000 crore or more. At the same time, high-end NBFCs are those which have been identified by the Reserve Bank to increase regulatory requirements.
(Inputs From Agencies)