Kanungo, a deputy governor, to manage the fund. Guidelines for Licensing of “Payments Banks” November 27, 2014 I. Preamble The Reserve Bank of India (RBI) issues licences to entities to carry on the business of banking and other businesses in which banking companies may engage, as defined and described in Sections 5 (b) and 6 (1) (a) to (o) of the Banking Regulation Act, 1949, respectively. 5 DBOD-MC-Housing Finance - 2014 2. 16/ 08.12.01/ 2001- 02 dated 20 February 2002 on financing of infrastructure projects. Save my name, email, and website in this browser for the next time I comment. RBI invites candidates to head Innovation Hub, RBI introduces digital payments index to track adoption, RBI bets on SupTech and RegTech to improve supervision, RBI to introduce ‘Digital Payment Security Controls’ guidelines, WhatsApp Launches UPI-Based Payments Feature In India, MediaNama: Roundtable On Copyright And Digital Media. Infrastructure Debt Fund-NBFC (IDF-NBFC) Facilitation of flow of long-term debt into infrastructure projects. The AC will create the rules for acquiring players to claim a subsidy depending on their capital expenditure, type of device, deployment location and other criteria. 5. Ans: The term ‘credit facility’ means a term loan, project loan subscription to bonds/ debentures/ preference shares/ equity shares in a project company acquired as a part of project finance package such that such subscription amounts to be “in the nature of advance” or any other form of long term funded facility provided to a borrower company engaged in developing/ operating and maintaining/ developing, operating and maintaining infrastructure facilities, that is a project in any of the sub-sectors as specified in the definition of infrastructure loan. DIRECT HOUSING FINANCE 2.1 Direct Housing Finance refers to the finance provided to individuals or groups of individuals including co-operative societies. 2. at 40% of Owned Funds), ii. Housing finance companies will be treated as a category of non-banks Should Amazon, Flipkart Show Country Of Origin Of Products? Includes optic fibre/cable networks which provide broadband / internet, 5. Risk Weights for … RBI relaxes ECB norms for infrastructure companies. 2. What is an Infrastructure finance? ETBFSI; January 06, 2021, 11:51 IST Q.5. What is the risk weight IFCs have to maintain on assets covering PPP and which have completed one year of commercial production? The Apex Bank directed HFCs to lend at least 60% of their net assets to housing through the final RBI guidelines issued on 22 October, which is a follow-up to a drafted issued in June 2020. Card networks to pay 1 basis point (bps) or, 0.01 paisa per rupee transaction, annually, Card issuing banks to 1 bps and 2 bps or, 0.01 paisa and 0.02 paisa per rupee transaction, for debit and credit cards respectively, on an annual basis, New entrants to the card payment eco-system (card issuer and card network) shall contribute an appropriate amount to the PIDF. Includes Medical Colleges, Para Medical Training Institutes and Diagnostics Centres. Q.5. But in the wake of the lockdown, digital... MediaNama is the premier source of information and analysis on Technology Policy in India. The stock of Srei Infrastructure Finance Ltd (SIFL) took a beating on the bourses in Monday’s trade in the backdrop of the Reserve Bank of India (RBI) engaging an … After CEO Dick Costolo, Twitter’s M&A Head Rishi Garg Quits, Gujarat HC Gives Livestreaming Court Proceedings A Shot, Sunil Mehta, Chief Executive of the Indian Banks’ Association, Dilip Asbe, Chief Executive Officer, National Payments Corporation of India, Vishwas Patel, Chairman of Payments Council of India, Shailesh Paul, Vice President and Head Merchant Sales and Solutions, Visa, Rajeev Kumar, Senior Vice President, Market Development, Mastercard, D Nageswara Rao, Chief General Manager, NABARD, R Vittal Raj, Chartered Accountant, Kumar & Raj Chartered Accountants, Ajay Michyari, Regional Director, Reserve Bank of India, Card issuing banks should pay ₹ 1 per debit card and ₹3 per credit card they have issued. 5 DBOD-MC-Housing Finance - 2014 2. Q.5. Currently, the Reserve Bank has classified NBFCs under three categories, viz., Asset Finance Companies, Loan companies and Investment Companies. Company dealing with Infrastructure Finance. Ltd. 21 November 2011. !function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"])for(var e in a.data["datawrapper-height"]){var t=document.getElementById("datawrapper-chart-"+e)||document.querySelector("iframe[src*='"+e+"']");t&&(t.style.height=a.data["datawrapper-height"][e]+"px")}}))}(); The RBI has mandated that all banks and card networks contribute to the PIDF. This definition is used in order to provide tax breaks or subsidies that have been promised to the infrastructure sector. A PIDF essentially subsides the cost of acquisition for banks to deploy payments infrastructure like physical PoS devices, mobile PoS, GPRS (General Packet Radio Service), PSTN (Public Switched Telephone Network), QR code-based payments and other card based payments methods. The Reserve Bank of India has provided guidelines on Cyber Security Framework vide circular DBS. Infrastructure Development Finance Company Limited, more commonly known as IDFC, is a finance company based in India. Acquirers who meet or exceed their targets, whether in terms of deployment time or greater utilisation of devices, will be “incentivised while those who do not achieve their targets shall be disincentivised,” the RBI says. Education Institutions (capital stock). The fund has a corpus of Rs 345 crore, of which Rs 250 crore was contributed by RBI and Rs 95 crore by authorized card networks operating in India. NIIF Infrastructure Finance Limited was incorporated as an Infrastructure Debt Fund (IDF) on March 7, 2014 for financing operating infrastructure projects and carry on the business of IDF under NBFC Format as per RBI Guidelines. Your email address will not be published. While the fund will have a corpus of ₹345 crore from the get-go, the RBI has introduced a fee that card networks and card-issuing banks will have to pay based on their annual turnover. The minimum credit rating of the company should be at 'A' or equivalent of CRISIL, FITCH, CARE, ICRA, BRICKWORK or equivalent rating by any other accrediting rating agencies. Guidelines on infrastructure financing Please refer to our Industrial & Export Credit Department's Circular No. (Photo: Mint) RBI proposes new rules for housing finance companies 2 min read. Please refer to the definition of 'Infrastructure Lending' contained in the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016. What is an IFC and what are the eligibility or entry point norms for registration of an IFC-NBFC with RBI? The guidelines will be technology and platform agnostic, the RBI said. The COVID-19 pandemic shut businesses and restricted people from normal activity for several months in 2020. The Reserve Bank of India … While the RBI has contributed ₹250 crore to the initial corpus of the PIDF, major card networks have provided ₹95 crore so far. Ans : IFC is a non-deposit accepting loan company which complies with the following : A minimum of 75 per cent of the total assets of an IFC-NBFC should be deployed in infrastructure loans; The company should have minimum net-worth of Rs 300 crore, The CRAR of of the company should be at 15% with Tier I capital at 10% and. 2.2 Banks are free to evolve their own guidelines with the approval of their Boards on aspects such as security, margin, age of dwelling units, repayment schedule, etc. Relaxing the ECB norms, the RBI today said NBFCs operating as infrastructure finance companies (IFCs) can now avail the overseas borrowings up to 75 per cent of their owned funds without its approval. Includes supporting terminal infrastructure such as loading/unloading terminals, stations and buildings, 2. In February 2013, RBI had issued final guidelines to apply for new banking licenses in the private sector. Their request must be supported by a certificate from their Statutory Auditors confirming the asset pattern of the company as on March 31, of the latest financial year. The RBI said NBFCs can invest only in PPPs and post-commercial operations date infrastructure (COD) projects which have completed at least one year of commercial operations. Your email address will not be published. About dividend distribution policy by NBFCs, the RBI said unlike banks, there are no guidelines for distribution of dividend by NBFCs. Here is everything you need to know about the new RBI guidelines on loan moratorium and what your current options are as a borrower. RBI announces guidelines for Payments Infrastructure Development Fund. What are the credit concentration norms for IFCs? RBI said that under extant guidelines on Basel III Capital Regulations, exposures/claims of banks on rated as well as unrated Non-deposit Taking Systemically Important Non-Banking Financial Companies (NBFC-ND-SIs), other than Asset Finance Companies (AFCs), Non-Banking Financial Companies – Infrastructure Finance Companies (NBFCs-IFC) and Non-Banking Financial Companies – Infrastructure … Further, exposure of a bank to the NBFCs-IFCs (Infrastructure Finance Companies) should not exceed 15 per cent of its capital funds as per its last audited balance sheet, with a provision to increase it to 20 per cent if the same is on account of funds on-lent by the IFCs to the infrastructure sector. The fund will be used to subsidize banks and non-banks for deploying payment infrastructure. As the Reserve Bank of India is conducting a special audit in Srei Infrastructure Finance … RBI’s proposals clearly define home finance firms. Investment in shares of another company cannot exceed 15% of its Owned Funds. The current legal status. In a notification to the exchanges, the lender said, RBI has appointed an auditor to conduct a special audit in exercise of its powers under Section 45 MA (3) of the RBI Act, 1934. Let us grasp the extant guidelines which do alter our ways to do business with HFCs. Made in India. RBI has been easing norms for borrowings by various entities in the past few weeks – from infrastructure firms to non-banking finance companies – as the credit markets have turned tight following the default by Infrastructure Leasing & Financial Services Ltd. Q.4. In a move aimed to at boost infrastructure financing, especially for the projects in roads and power sector, the Reserve Bank of India (RBI) has eased the norms for treating bank loans as secured finance even in the absence of collaterals.. Srei Infrastructure Finance and its subsidiary Srei Equipment Finance, chairman Hemant Kanoria. While the RBI has set out broad guidelines, it has formed an Advisory Council (AC) responsible for managing the fund and framing the operational rules. 3. The Reserve Bank of India (RBI) has introduced guidelines for the Payments Infrastructure Development Fund (PIDF) scheme, which will subsidise the deployment of … Ans: Infrastructure Finance Companies can maintain risk weight at 50% for assets covering PPP and post commercial operations date (COD) projects which have completed at least one year of satisfactory commercial operations and which are backed by a buyback guarantee by a designated Project / Statutory authority under a Tripartite Agreement. 2.2 Banks are free to evolve their own guidelines with the approval of their Boards on aspects such as security, margin, age of dwelling units, repayment schedule, etc. (Photo: Mint) RBI proposes new rules for housing finance companies 2 min read. (Mint file) RBI to issue revised norms for housing finance companies 1 min read. DIRECT HOUSING FINANCE 2.1 Direct Housing Finance refers to the finance provided to individuals or groups of individuals including co-operative societies. Includes cold room facility for farm level pre-cooling, for preservation or storage of agriculture and allied produce, marine products and meat. © 2008-2018 Mixed Bag Media Pvt. Includes city gas distribution network, 4. 6. It has now been decided to introduce a fourth category of NBFCs as "Infrastructure Finance Companies" (IFCs). Q.3. The RBI will contribute to yearly shortfalls, if any. (vi) every Non-Banking Finance Company - Infrastructure Finance Company (NBFC- IFC) registered with the Bank under the provisions of RBI Act, 1934 and having an asset size of ₹ 500 crore and above. d) Infrastructure Finance Companies (IFCs) i.e. RBI FAQS on Infrastructure Finance Companies (IFCs) TG Team | Fema / RBI - Articles; 20 Mar 2016; 1,627 Views; 0 comment; Infrastructure Finance Companies (IFCs) Q.1. The aim of the fund is to add 1 million physical payment acceptance devices and 2 million digital payments devices every year, the RBI says. Having norms for dividend distribution by finance companies has become necessary due to their increasing significance in the financial system and their interlinkages with different segments. Updated: 18 Jun 2020, 12:09 AM IST Gopika Gopakumar. More about MediaNama, and contact information, here. Housing finance companies will be treated as a category of non-banks Copyright © 2020 MediaNama. Infrastructure Finance Company (IFC): IFC is a non-banking finance company a) which deploys at least 75 per cent of its total assets in infrastructure loans, b) has a minimum Net Owned Funds of ₹ 300 crore, c) has a minimum credit rating of ‘A ‘or equivalent d) and a CRAR of 15%. Deepa Mehta ‘disappointed’ Netflix India won’t be streaming Funny Boy, US Trade Representative publishes report blasting India’s 2% Equalisation Levy, MEITY considering reimbursing payment companies for UPI: Report, Twitter, Facebook, Instagram temporarily suspend Donald Trump’s account, Traders’ body wants 5% tax on e-commerce players. Read more about RBI to conduct special audit of Srei Infrastructure Finance, subsidiary on Business Standard. a. “NBFCs may refinance any existing infrastructure … MUMBAI: The RBI on Tuesday permitted startups, banks and financial institutions to set up regulatory sandbox (RS) for live testing of innovative products in areas like retail payments, digital KYC and wealth management. NIIF Infrastructure Finance Limited was incorporated as an Infrastructure Debt Fund (IDF) on March 7, 2014 for financing operating infrastructure projects and carry on the business of IDF under NBFC Format as per RBI Guidelines. Annex II - Guidelines on Liquidity Risk Management Framework ... (vi) every Non-Banking Finance Company - Infrastructure Finance Company (NBFC-IFC) registered with the Bank under the provisions of RBI Act, 1934 and having an asset size of ₹ 500 crore and above. Ans: Infrastructure Finance Companies can maintain risk weight at 50% for assets covering PPP and post commercial operations date (COD) projects which have completed at least one year of satisfactory commercial operations and which are backed by a buyback guarantee by a designated Project / Statutory authority under a Tripartite Agreement. RBI issues guidelines for banks sponsoring infrastructure debt funds. Ans “Infrastructure loan” means a credit facility extended by NBFCs to a borrower for exposure in the following infrastructure sub-sectors: Sl.No. Maximum cost of physical acceptance device to avail subsidy: ₹10,000 (including one-time operating cost upto ₹500), Maximum cost of digital acceptance device to avail subsidy: ₹ 300 (including one-time operating cost upto ₹200), AC should introduce a ‘minimum usage’ criteria set 50 transactions over a period of 90 days, Active status shall be minimum usage for 10 days over the 90-day period, 75% of the subsidy amount will be released on a half-yearly basis, 25% of the balance will be released if the acceptance device is active for 3 out of the 4 quarters of the ensuing year, The claim should be submitted only after making payment to the vendor, Acquiring players cannot claim the subsidy under the PIDF, if it is receiving a subsidy under other merchanisms for deploying payments infrastructure, If less than 75% of the target is achieved or utilised, the acquirer can only seek 90% of eligible subsidy, If 75% to 125% of the target is achieved or utilised, the acquirer can claim 100% of eligible subsidy, If more than 125% of the target is achieved or utilised, the acquirer can only seek 110% of eligible subsidy. 5. The final guidelines follow a draft issued in June this year and seek to harmonise regulations between non-bank lenders and housing financiers. Under these guidelines, RBI said that the entities or groups in the private sector, entities in public sector and Non-Banking Financial Companies (NBFCs) can set up a bank, which shall be a wholly-owned Non-Operative Financial Holding Company (NOFHC). In order to encourage lending by banks to the infrastructure sector, banks are permitted to finance SPVs registered under the Companies Act, set up for financing infrastructure projects, after ensuring that these The Reserve Bank of India has issued a revised set of guidelines for housing finance companies after it took over regulation of these lenders last year. However, this definition is more for the government’s internal operations. Company history. Best viewed in 1024x768 resolution in IE 5 and above. © Reserve Bank of India. . It has provided a matrix in terms of where banks and other merchant acquirers need to deploy payments’ infrastructure, with the focus on deploying payments infrastructure in Tier-5 and Tier-6 centres. For the same, The Reserve Bank of India (RBI) made amendments to the administrative structure for housing finance companies (HFCs) on 22 October 2020. RBI’s proposals clearly define home finance firms. The Central Government had, with effect from August 09, 2019, transferred regulatory powers of the Housing Finance Companies (“HFCs”) from the National Housing Bank (“NHB”) to the Reserve Bank of India (“RBI”).It is further stated that the RBI will review the extant of regulatory framework applicable to HFCs and issue the same in due course. The Reserve Bank of India (RBI) has introduced guidelines for the Payments Infrastructure Development Fund (PIDF) scheme, which will subsidise the deployment of payments touch points across Tier-3 to Tier-6 centres and the North-Eastern states. Includes strategic storage of crude oil, 3. The Reserve Bank of India has decided to assign risk weights for the rated exposures of banks to all non-banking financial companies (NBFC) to facilitate credit flow to the sector that is reeling under liquidity pressure post IL&FS defaults in August.The guidelines will be out by February end. SREI Infrastructure Finance slumped 14.61% to Rs 5.73 after the Reserve Bank of India (RBI) initiated a special audit of the company and its subsidiary. What constitutes ‘credit facility’ under the definition of infrastructure loan? Required fields are marked *. b. ten percent of its owned fund to a single group of parties, (i.e. Exposure to other assets shall be governed by the extant regulations applicable to Infrastructure Finance Companies as given in Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015. Updated: 18 Jun 2020, 12:09 AM IST Gopika Gopakumar. RBI guidelines on risk-weightage of NBFCs: Better credit flow, lower cost of funds among key benefits . The funds will be collected January 31, 2021. By: PTI | Mumbai | November 7, 2018 10:44 PM. Scheduled commercial banks in the country would be allowed to … benefits under restructuring guidelines and permission to extend finance for funding promoter’s equity, subject to certain conditions. To encourage infrastructure financing, RBI today eased norms for NBFCs to refinance such projects and provide longer repayment tenures. 6. Meantime, to facilitate raising of funds for longer term lending, RBI has said that long-term bonds sold to finance the infrastructure sector will be exempt from certain regulatory requirements. RBI Guidelines for Cyber Security Framework RBI Guidelines for Cyber Security Framework In a race to adopt technology innovations, Banks have increased their exposure to cyber incidents/ attacks thereby underlining the urgent need to put in place a robust cyber security and resilience framework. The Reserve Bank of India (RBI) on Friday released revised priority sector lending (PSL) guidelines to augment funding for COVID-19 impacted companies.. Also … •Further, exposure of a bank to the NBFCs-IFCs (Infrastructure Finance Companies) should not exceed 15 per cent of its capital funds as per its last audited balance sheet, with a provision to increase it to 20 per cent if the same is on account of funds on-lent by the IFCs to the infrastructure sector. “Infrastructure companies couldn’t have asked for anything better at his point," said Subba Rao Amarthulu, group chief financial officer at RPG Enterprises. NEW DELHI: The Reserve Bank of India's revised regulatory framework for the housing finance companies will help them improve risk management and governance and thus become financially sound to withstand market turbulence, according to experts. i. It is headed by BP Kanungo, Deputy Governor of the RBI and includes: The RBI says banks should target merchants who are yet to posses any payments acceptance device funds and that the AC will have to devise a transparent mechanism for allocating targets to acquiring banks and non-bank players across segments and locations. A lender who has extended only working capital finance for a project may be treated as 'new lender' for taking over a part of the project term loan as required under the guidelines. Depending on their performance, the subsidy will be paid on a half yearly basis, the RBI says. The above facility will be available only once during the life of the existing project loans. Investment in shares of a single group of companies cannot exceed 25% of its Owned Funds. Srinivasan) Chief General Manager It provides finance and advisory services for infrastructure projects as well as asset management and investment banking. The PIDF will operational for three years from January 1, 2021, which can be extended by two years if necessary. RBI's move will bolster India's rural economy, open wide a new user base for fintech companies, as well as enable more commerce in Tier III and lower areas. NBFCs, categorized as IFCs, by RBI (beyond 50% of their owned funds) for on-lending to the infrastructure sector as defined under the ECB policy and subject to compliance of certain stipulations. The Reserve Bank of India (RBI) is conducting a special audit of Kolkata-based lender Srei Infrastructure Finance and its subsidiary, Srei Equipment Finance. RBI has been receiving requests in the recent past suggesting a need for review of guidelines on infrastructure financing by banks. Updated: 13 Aug 2019, 07:16 PM IST Shayan Ghosh. Ans: Infrastructure Finance Companies can maintain risk weight at 50% for assets covering PPP and post commercial operations date (COD) projects which have completed at least one year of satisfactory commercial operations and which are backed by a buyback guarantee by a designated Project / Statutory authority under a Tripartite Agreement. The financing of projects or companies involved in these sectors is called infrastructure financing. Developed By PixelVJ. Ans: Infrastructure Finance Companies can maintain risk weight at 50% for assets covering PPP and post commercial operations date (COD) projects which have completed at least one year of satisfactory commercial operations and which are backed by a buyback guarantee by a designated Project / Statutory authority under a Tripartite Agreement. Annual Return on Deposits (Filed annually after closure of financial year and latest by September 30) Regional Office of Department of Non-­ Banking Supervision, RBI where registered office of the company is situated: Form Schedule “A” General Information of the Company (filed annually as early as possible latest by the 30th September) b. e) Foreign Currency Convertible Bonds (FCCBs) by Housing Finance Companies. The Reserve Bank of India (RBI) has introduced guidelines for the Payments Infrastructure Development Fund (PIDF) scheme, which will subsidise the deployment of … Updated: 13 Aug 2019, 07:16 PM IST Shayan Ghosh. List of Infrastructure Finance Companies (NBFC-IFCs) registered with RBI (As on July 16, 2020) List of NBFC- Peer to Peer (P2P) registered with RBI (As on July 16, 2020) List of Deposit accepting NBFCs registered with RBI that have been prohibited from accepting deposits under Section 45 MB of RBI Act,1934 (As on September 30, 2019) at 50% of Owned funds). The Reserve Bank of India on Tuesday announced operational guidelines for the Payments Infrastructure Development Fund scheme.The RBI said that it has constituted an advisory council under the chairmanship of B.P. iii. Q.5. Section 20A of the Banking Regulation Act, 1949 stipulates that notwithstanding anything to the contrary contained in Section 293 of the Companies Act, 1956, a banking company shall not, except with the prior approval of the Reserve Bank, remit in whole or in part any debt due to it by - (a) any of its directors, or Annex V - Guidelines for Licensing of New Banks in the Private Sector Definitions Annex VI - Norms on Restructuring of Advances by NBFC Annex VII - Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries Annex VIII - Ombudsman Scheme for Non-Banking Financial Companies, 2018 - Nodal Officer/Principal Nodal Officer The extant norms for investment for both single party and single group of parties will remain same as in Para 18 of the Directions, i.e. Going forward, issuing banks will have to pay the same rate for every new debit and credit card they issue, respectively, during the year. 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