RBI refuses to relax asset classification, provisioning norms for NBFCs

The Reserve Bank of India (RBI) has turned down the request of non-banking financial companies (NBFC) to relax asset classification and provisioning norms.  

This will give rise to bad debt numbers of such para banks on technical grounds while making asset quality norms standardised across banks and NBFCs. The para banks are now rapidly filling in the positions left vacant by the risk-averse banks, and their asset book is close to 20 per cent of banks’ total credit.  

The NBFC lobby group Finance Industry Development Council (FIDC) had approached the RBI to offer relaxation in the NPA norms, but the RBI has