Reserve Bank of India panel for higher risk weights for NBFCs

A panel from the Reserve Bank of India (RBI) on Monday suggested higher risk weights on capital market and commercial property exposures for non-bank finance companies (NBFC) that are not sponsored by a bank or don't have any bank as part of its group.

The RBI panel, suggested in its report on issues and concerns within the NBFC sector, to impose a risk weight of 150% for capital market loans and 125% for commercial property loans by such NBFCs.

Non-bank financial companies (NBFCs) should have a minimum 12% Tier I capital adequacy ratio within 3 years of registration, a Reserve Bank of India [RBI] advisory panel suggested upon Monday.

The RBI had constituted a working group in March to examine issues regarding the regulation of NBFCs.