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RBI bundles NBFCs into 1 type, offering operational flexibility

The central bank also decided that exposures to all NBFCs, excluding core investment companies, will be risk weighted as per credit ratings.

February 22, 2019 / 09:47 PM IST

To provide greater operational flexibility to non-banking lenders, the Reserve Bank on Friday created a single category for them by bundling their present three-tier structure.

The central bank also decided that exposures to all NBFCs, excluding core investment companies, will be risk weighted as per credit ratings.

Both the decisions were first announced at the last bi-monthly review of the monetary policy in the statement on developmental and regulatory policies.

"It has been decided that to provide NBFCs with greater operational flexibility, harmonisation of different categories of NBFCs into fewer ones shall be carried out based on the principle of regulation by activity rather than regulation by entity," the RBI notification said.