RBI rules out equal treatment for NBFCs with banks

.....“NBFCs as a class of financial institutions are concentrated niche players, hence the CRAR (capital to risk weighted assets ratio) has been fixed at 15%, well above 9% for banks,” RBI said in a clarification. “NBFCs which describe themselves as ‘gold NBFCS’ are further exposed to the risk of having to deal in a specific commodity. Hence the risk is higher in them vis-a-vis all other NBFCs.” They can’t be compared with banks, even those that extend jewellery loans, as this may be a “minuscule portion of the balance sheet and all banks are diversified entities”, it said.......

 

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