RBI/2009-10/316
DNBS.PD. CC
No.168/03.02.089 /2009-10
February 12 , 2010
All Non-Banking Financial Companies
excluding Residuary Non-Banking Companies
Dear Sir,
Infrastructure Finance Companies
Please refer to
paragraph 178 of
the Second Quarter Review of the Monetary
Policy for the year 2009-10. NBFCs-ND-SI
engaged predominantly in infrastructure
financing have represented to the Reserve
Bank that there should be a separate
category of infrastructure financing NBFCs
in view of the critical role played by them
in providing credit to the infrastructure
sector. Currently, the Reserve Bank has
classified NBFCs under three categories,
viz., Asset Finance Companies, Loan
companies and Investment Companies. It has
now been decided to introduce a fourth
category of NBFCs as "Infrastructure Finance
Companies"(IFCs).
2. Accordingly, it is advised that the
present classification of NBFCs stands
modified to include IFCs. An IFC is defined
as non deposit taking NBFC that fulfills the
criteria mentioned below:
i) a minimum of 75 per cent of its total
assets should be deployed in infrastructure
loans as defined in Para 2(viii) of the Non
Banking Financial (Non Deposit Accepting or
Holding) Companies Prudential Norms (Reserve
Bank) Directions, 2007;
ii) Net owned funds of Rs. 300 crore or
above;
iii) minimum credit rating 'A' or
equivalent of CRISIL, FITCH, CARE, ICRA or
equivalent rating by any other accrediting
rating agencies
iv) CRAR of 15 percent (with a minimum Tier
I capital of 10 percent).
3. IFCs may exceed the concentration of
credit norms as provided in paragraph 18 of
the aforesaid Directions as under:
(i) in lending to
(a) any single borrower by ten per cent
of its owned fund; and
(b) any single group of borrowers by
fifteen per cent of its owned fund;
(ii) in lending and investing
(loans/investments taken together) by
(a) five percent of its owned fund to a
single party; and
(b) ten percent of its owned fund to a
single group of parties.
(iii) The extant norms for investment for
both single party and single group of
parties will remain same as in Para 20 of
the Directions referred to above.
4. The present norms relating to
infrastructure loan as laid out in Para 20
of the aforesaid Directions will continue
for NBFCs that do not meet the criteria to
be classified as IFCs.
5. Since the classification for the purpose
of income recognition, asset classification
and provisioning norms is based on asset
specification, the extant prudential norms
will continue as hitherto.
6. The companies satisfying the above
conditions may approach the Regional Office
in the jurisdiction of which their
Registered Office is located, along with the
original Certificate of Registration (CoR)
issued by the Bank for classification as
Infrastructure Finance Companies. Their
request must be supported by a certificate
from their Statutory Auditors confirming the
asset /income pattern of the company as on
March 31, of the latest financial year. The
change in classification would be
incorporated in the Certificate of
Registration issued by the Bank as
NBFC-ND-IFC.
7. The onus of including only eligible
assets for the purpose of classification as
IFC shall be that of the company concerned.
8. A copy of the
amending
Notification No. DNBS.213 / CGM(ASR)-2010
dated February 12, 2010 is enclosed for
compliance.
Yours faithfully,
(A.S.Rao)
Chief General Manager In-Charge
RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
Notification No. DNBS. 213 / CGM(ASR)-2010
dated February 12, 2010
The Reserve Bank of India, having considered
it necessary in public interest and being
satisfied that, for the purpose of enabling
the Bank to regulate the credit system to
the advantage of the country, it is
necessary to amend the Non-Banking Financial
(Non- Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank)
Directions, 2007, contained in Notification
No. DNBS. 193/DG(VL)-2007 dated February
22, 2007 (hereinafter referred to as the
Directions), in exercise of the powers
conferred by sections 45J, 45JA and 45L of
the Reserve Bank of India Act, 1934 (2 of
1934) and of all the powers enabling it in
this behalf, hereby directs that the said
Directionsshall be amended with immediate
effect as follows, namely -
1. Amendment of
paragraph 1–
In sub-paragraph (3), at the end of clause (i)
the words, “including an infrastructure
finance company”, shall be inserted.
2 Amendment of
paragraph 2 –
(1) In sub-paragraph (1), after clause
(vii), the following clause (viia) shall be
inserted .
“(viia) ‘Infrastructure Finance Company’
means a non-banking finance company
which deploys at least 75 per cent of
its total assets in infrastructure
loans”
(2) In sub-paragraph (1), in clause (viii),
after sub-clause (h), the following
sub-clause (ha) shall be inserted.
"(ha) laying down and/or maintenance of
gas, crude oil and petroleum pipelines"
(3) In sub-paragraph (1), in clause (viii),
sub-clause (k), viz, "construction of
educational institutions and hospitals"
shall be deleted.
3. Insertion of new
paragraph -
After paragraph 19, the following paragraph
19A shall be inserted–
“Requirements for Infrastructure
Finance Company -
19A.
An Infrastructure Finance
Company shall, -
-
not accept deposits from the public;
-
have net owned funds of Rs. 300 crore or
above;
-
have a minimum credit rating 'A' or
equivalent of CRISIL, FITCH, CARE, ICRA
or equivalent rating by any other
accredited rating agencies; and
-
have a CRAR of 15 percent (with a
minimum Tier I capital of 10 percent).
4. Amendment of
paragraph 20
–
(1) After sub-paragraph (12), the following
sub-paragraph (12A) shall be inserted.
"(12A) Infrastructure Finance Companies may
exceed the concentration of credit norms as
provided in paragraph 18 of the aforesaid
Directions,
(i) in lending to
(a) any single borrower, by ten per cent
of its owned fund; and
(b) any single group of borrowers, by
fifteen per cent of its owned fund;
(ii) in lending to and investing in,
(loans/investments taken together)
(a) a single party, by five percent of
its owned fund; and
(b) a single group of parties, by ten
percent of its owned fund.
(A S Rao)
Chief General Manager In-Charge
