The central bank has raised the provisioning requirement made for standard assets category to the non-deposit taking systemically important NBFCs to 2% from the earlier level of 0.4%. It has also hiked the risk weight assigned by banks for their exposure to such NBFCs to 125% from the existing level of 100%. Systemically important NBFCs are those NBFCs having an asset size of Rs 100 crore or more.

“The move is a deliberate attempt to check the excess leverage of such NBFCs,” said Mahesh Thakkar, head-Finance Industry Development Council, a federation of asset financing companies (AFCs).

However, it is not going to affect us since the new norms are not specified for AFCs, he added. The RBI has left unchanged the provisioning requirements and risk weights for banks’ exposures to AFCs. Just in the last month, RBI had acceded to demands of the NBFCs engaged in financing tangible assets to classify them as asset financing companies (AFCs).

In November, RBI released the revised draft guidelines wherein it capped the bank’s exposure to single NBFC at 10% of bank’s capital funds and aggregate exposure of a bank to all NBFCs to 40% of the bank’s capital funds.