The Reserve Bank of India (“RBI”) vide a press release dated February 7, 2019, has issued the ‘Statement on Developmental and Regulatory Policies’ (“Press Release”). The Press Release sets out various developmental and regulatory policy measures for strengthening regulation and supervisions, broadening and deepening of the financial markets, payments and settlement systems, and financial inclusion.
In addition to the relaxation allowed in the external commercial borrowing framework for resolution applicants, the following key measures have been proposed in the Press Release:
a. Harmonisation of NBFC categories [paragraph 5]
The Committee on Comprehensive Financial Services for Small Businesses and Low Income Households, and the Internal Committee, which submitted their reports in January 2014 and April 2014 respectively, had recommended harmonisation of the various categories of NBFCs. Pursuant to the aforesaid and in order to reduce the complexities arising from multiple categories of NBFCs and also to provide greater flexibilities to NBFCs, RBI has now decided to harmonise the major categories of NBFCs engaged in credit intermediation i.e. asset finance companies, loan companies and investment companies, into a single category. The guidelines in this regard will be issued by the end of February 2019.
b. Investment by Foreign Portfolio Investors in corporate debt [paragraph 10]
Pursuant to paragraph 4(f)(ii) of the circular, dated June 15, 2018, issued by RBI, in relation to investment by foreign portfolio investors (“FPI”) in debt, a FPI was prohibited from having an exposure of more than 20% (twenty percent) of its corporate bond portfolio in a single corporate. With a view to encourage a wider spectrum of investors to access the Indian corporate debt market, the RBI has now proposed to withdraw the aforesaid restriction. A circular to this effect will be issued by mid-February 2019.
Download Pdf
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.