RBI Issued Revised Guidelines for  IDF-NBFCs

The  RBI issued revised guidelines on Infrastructure Debt Fund-NBFCs (IDF-NBFCs). They will now have a net-owned fund of Rs. 300 crores.

Besides this, they should also have a capital-to-risk-weighted asset ratio to a minimum of 15% along with a minimum tier 1 capital of 10% 

A review of the regulations that apply to IDF-NBFCs has been carried out in consultation with the Government of India.  

To enable them to play a greater role in the financing of the infrastructure sector and to harmonise the laws governing NBFCs' financing of the infrastructure sector. 

A non-deposit-taking NBFC that is permitted to refinance infrastructure projects after at least one year of successful commercial operations is referred to as an IDF-NBFC in the updated definition.  

They may also use shorter-term bonds and commercial papers (CPs), up to 10% of their total outstanding borrowings, for improved asset-liability management (ALM).

Furthermore, provided they have a minimum tenure of five years and are not obtained through foreign branches of Indian banks, external commercial borrowings (ECBs) may be utilised.

Next: 10 Investing Books to Add To Your Reading List