New category of NBFCs- RBIs Notification-‘Infrastructure Finance Company’

Feb-13th-2010

RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.

Notification No. DNBS. 213 / CGM(ASR)-2010 dated  February 11, 2010
The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, contained in Notification No. DNBS. 193/DG(VL)-2007 dated February  22, 2007 (hereinafter referred to as the Directions), in exercise of the powers conferred by sections 45J, 45JA and 45L of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said Directions shall be amended with immediate effect as follows, namely -
1. Amendment of paragraph 1–
In sub-paragraph (3), at the end of clause (i) the words, “including an infrastructure finance company”, shall be inserted.
2   Amendment of paragraph 2 –
(1) In sub-paragraph (1), after clause (vii), the following clause (viia) shall be inserted .

“(viia) ‘Infrastructure Finance Company’ means a non-banking finance company which deploys at least 75 per cent of its total assets in infrastructure loans”

(2) In sub-paragraph (1), in clause (viii), after sub-clause (h), the following sub-clause (ha) shall be inserted.

“(ha) laying down and/or maintenance of gas, crude oil and petroleum pipelines”  

(3)  In sub-paragraph (1), in clause (viii), sub-clause (k), viz, “construction of educational institutions and hospitals” shall be deleted.
3. Insertion of new paragraph -
After paragraph 19, the following paragraph 19A shall be inserted–
“Requirements for Infrastructure Finance Company -
19A. An Infrastructure Finance Company shall, -

1. not accept deposits from the public;
2. have net owned funds of Rs. 300 crore or above;
3. have a minimum credit rating  ‘A’  or equivalent of CRISIL, FITCH, CARE, ICRA  or equivalent rating by any other accredited rating agencies; and
4. have a CRAR of 15 percent  (with a minimum Tier I capital of 10 percent).

4. Amendment of paragraph 20 –
(1) After sub-paragraph (12), the following sub-paragraph (12A) shall be inserted.

“(12A) Infrastructure Finance Companies may exceed the concentration of credit norms as provided in paragraph 18 of the aforesaid Directions,

(i)  in lending to
   (a) any single borrower, by ten per cent of its owned fund; and
   (b) any single group of borrowers, by fifteen per cent of its owned  fund;
(ii)  in lending to and investing in, (loans/investments taken together)
   (a)  a single party, by five percent of its owned fund; and
   (b) a single group of parties, by ten cent of its owned fund.
(A S Rao)