Dear All,
RBI vide circular dated 05th January 2022 issued a Master Circular on Bank Finance to Non-Banking Financial Companies (NBFCs).The said circular laysdown the Reserve Bank of India’s regulatory policy regarding financing of NBFCs by banks. It applies to all Scheduled Commercial Banks (excluding Regional Rural Banks).
It says that banks may also extend finance to NBFCs against second hand assets financed by them.
Banks may formulate suitable loan policy with the approval of their Boards of Directors within the prudential guidelines and exposure norms prescribed by the Reserve Bank to extend various kinds of credit facilities to NBFCs subject to the conditions that the specified activities are not financed by them.
It also contains eligibility norms, certain prohibitions and other provisions related to financing of NBFCs by Banks.
Link of Circular:https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12218&Mode=0
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