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Nbfc %

mahasweta deb (nil) (42 Points)

11 October 2012

Can anyone plz tell me is there any change in NBFC % for november 2012 exam ?? thnks

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4 Replies

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 11 October 2012

Pls specify what kinfd of %?????

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mahasweta deb (nil) (42 Points)
Replied 11 October 2012

Amount (%) of provision whch must b made against advances of NBFC..

(Guest)

Provision of 0.25% for standard assets of all NBFCs RBI has issued a notification no. DNBS.PD.CC.No.207/03.02.002/2010-11 dated January 17, 2011. As per the notification, in terms of Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, and Non- Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, all NBFCs are required to make necessary provisions for non performing assets. In the interests of counter cyclicality and so as to ensure that NBFCs create a financial buffer to protect them from the effect of economic downturns, it has been decided to introduce provisioning for standard assets also. Accordingly, (i) NBFCs should make a general provision at 0.25 per cent of the outstanding standard assets. (ii) The provisions on standard assets should not be reckoned for arriving at net NPAs. (iii) The provisions towards Standard Assets need not be netted from gross advances but shown separately as ‘Contingent Provisions against Standard Assets’ in the balance sheet. (iv) NBFCs are allowed to indude the ‘General Provisions on Standard Assets’ in Tier II capital which together with other ‘general provisions/loss reserves’ will be admitted as Tier II capital only up to a maximum of 1.25 per cent of the total risk-weighted assets. Notifications No. DNBS. 222 CGM(US)2011 and No. DNBS. 223 CGM (US) 2011 both dated January 17, 2011 are also issued for meticulous compliance of the said norms. All Deposit taking NBFCs - CRAR Fifteen percent w.e.f March 31, 2012 In terms of paragraph 16 of Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, every deposit taking NBFC shall maintain a minimum capital ratio consisting of Tier I and Tier II capital, which shall not be less than 12% of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items. However, in terms of paragraph 16 of Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, dated February 22, 2007, every systemically important non-deposit taking NBFC (NBFC-ND-Sl) has to maintain a minimum capital ratio consisting of Tier I and Tier II capital, which shall not be less than 15% of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items by March 31, 2011.