December 28, 2018

RBI issued a circular that extends, to March 31, 2019, the Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) against credit disbursed to non-banking financial companies (NBFCs) and Housing Finance Companies (HFCs).

Banks have been permitted to reckon government securities as Level 1 High Quality Liquid Assets (HQLA) under FALLCR within the mandatory statutory liquidity ratio requirement up to 0.5% of the bank’s Net Demand and Time Liabilities (NDTL) in respect of their incremental lending to NBFCs and HFCs after October 19, 2018. This facility was available up to December 31, 2018. Additionally, the single borrower limit for NBFCs (not financing infrastructure) has been increased from 10% to 15% of capital funds till December 31, 2018. To further facilitate banks to lend to NBFCs and HFCs as indicated, it has been decided to extend the aforesaid facilities up to March 31, 2019.

The circular also noted that with effect from April 01, 2019, banks shall be guided by the instructions contained in circular dated December 01, 2016 in terms of which banks’ exposures to a single NBFC shall be restricted to 15% of their eligible capital base (tier 1 capital).

Keywords: Asia Pacific, India, Banking, Liquidity Risk, Basel III, LCR, HQLA, FALLCR, NBFC, HFC, Statutory Liquidity Ratio, RBI

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476