Last week, RBI proposed stricter regulation for non-banking financial companies (NBFCs) and proposed classifying them into four categories based on their size and risk perception. The proposed regulations would vary according to the size of the NBFC, RBI said. India’s non-bank lenders have been plagued by a liquidity crunch since a series of defaults by Infrastructure Leasing & Financial Services in September 2018. Others also said that the proposals lack strict regulations on maintaining a specific liquidity buffer by non-bank lenders. The existing non-performing loan classification norm for these NBFCs will also be changed to 90 days from 180 days now.

Source: Mint January 27, 2021 23:48 UTC