“Restrictions/stipulations for particular mortgage segments relevant to banks, have been made relevant mutatis mutandis to NBFC group entities to obviate any circumvention of rules,” RBI mentioned. RBI imposes restrictions, particularly for lending to associated events (administrators/officers) with board approval required for big loans above materiality thresholds above Rs 1 crore.
Lending in opposition to shares of the dad or mum financial institution (or group entities) to insiders or for acquisition functions faces stricter scrutiny from RBI which is now prolonged to NBFCs to deliver them on par with banks.
Within the last round RBI nevertheless accepted NBFC’s suggestion to exempt itemizing for NBFC group entities which haven’t been independently recognized as higher layer by the central financial institution.
Within the draft pointers launched in October final yr RBI had allowed solely a single entity inside a financial institution group to undertake a specific enterprise. After taking ideas from banks, RBI has allowed a number of entities in a financial institution group to undertake identical enterprise however catering to completely different segments based mostly on geography, buyer profile, ticket measurement, and many others.
“To permit flexibility within the method by which a financial institution needs to conduct its enterprise, the suggestion has been accepted. Nonetheless, to make sure that the overlap in companies undertaken by financial institution group has correct rationale/justification, board approval is being mandated,” RBI mentioned.
Banks and NBFCs had requested an extension of the timeline for implementation of the brand new norms which was not accepted by RBI which implies that the brand new pointers will likely be efficient from March 31, 2028. “Banks have been suggested to submit the standing/detailed motion plan, as relevant, by March 31, 2026,” RBI mentioned.Funding administration enterprise has additionally been added within the listing of actions that may be undertaken by way of their group entity, accepting banks’ ideas.
The combination shareholding of a financial institution group in any ARC has been saved at lower than 20%, dismissing banks’ suggestion needed to permit shareholding with none restrictions.
