Deposit-taking NBFC to maintain 15% CAR

By Saikat Das

Non-banking finance companies that accept deposits will now have to maintain a capital adequacy ratio (CAR) of 15%, up from 12% currently, the Reserve Bank of India (RBI) notified on Thursday. This means for these NBFCs to give Rs 100 as loans, they should have a capital base (equity + debt) of Rs 15. For NBFCs that do not accept deposits, the capital adequacy ratio is currently 15%.

"It has been decided to align the minimum capital ratio of all deposit taking as well as systemically important non-deposit taking NBFCs to 15%. Accordingly, all deposit taking NBFCs shall maintain a minimum capital ratio consisting of Tier I and Tier II capital, which shall not be less than 15% of its aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items with effect from March 31, 2012,