New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    What is the wrong statement about

    NBFCs?
    A There shall be a ceiling of ₹1 crore per borrower for financing subscription to Initial Public Offer (IPO) for listing of NBFCs Correct Answer Incorrect Answer
    B In order to enhance the quality of regulatory capital, NBFC-UL (Upper Layer) shall maintain Common Equity Tier 1 capital of at least 9 per cent of Risk Weighted Assets Correct Answer Incorrect Answer
    C The extant NPA classification norm stands changed to the overdue period of more than 90 days for all categories of NBFCs Correct Answer Incorrect Answer
    D Housing Finance Companies (NBFC-HFC) are regulated by NHB Correct Answer Incorrect Answer
    E NBFCs without public funds and customer interface will always remain in the Base Layer of the regulatory structure Correct Answer Incorrect Answer

    Solution

    Housing Finance companies are regulated by RBI w.e.f 2019 Rest of the statements are true. As per the recent Scale Based Regulation by RBI for NBFCs NBFCs without public funds and customer interface will always remain in the Base Layer of the regulatory structure The extant NPA classification norm stands changed to the overdue period of more than 90 days for all categories of NBFCs. A glide path is provided to NBFCs in Base Layer to adhere to the 90 days NPA norm as under –

    NPA Norms Timeline
    >150 days overdue By March 31, 2024
    >120 days overdue By March 31, 2025
    > 90 days By March 31, 2026
    The glide path will not be applicable to NBFCs which are already required to follow the 90-day NPA norm. There shall be a ceiling of ₹1 crore per borrower for financing subscription to Initial Public Offer (IPO). NBFCs can fix more conservative limits Please refer to the Circular RBI/2021-22/112 DOR.CRE.REC.No.60/03.10.001/2021-22 dated 12.10.2021 for more details (also refer to notes on NBFCs)

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