RBI on August 18, 2023 has issued the Review of Regulatory Framework for Infrastructure Debt Fund(IDF)-NBFCs. In order to enable IDF-NBFCs to play a greater role in the financing of the infrastructure sector and to harmonize the regulations governing financing of infrastructure sector by the NBFCs, a review of the guidelines applicable to IDF-NBFCs has been undertaken, in consultation with the Government of India.
The exposure limits for IDF-NBFCs shall be 30% of their Tier 1 capital for single borrower/ party and 50% of their Tier 1 capital for single group of borrowers/ parties. For computing CRAR of the IDF-NBFCs, their assets shall be risk-weighted as per risk-weights applicable to NBFC-Investment and Credit Companies (NBFC-ICCs.
All NBFCs shall be eligible to sponsor (sponsorship as defined by SEBI Regulations for Mutual Funds) IDF-MFs with prior approval of the RBI subject to the following conditions (based on the audited financial statements), in addition to those prescribed by SEBI:
(i) The NBFC shall have a minimum NOF of ₹300 crore and CRAR of 15 percent;
(ii) Its net NPAs shall be less than 3 per cent of the net advances;
(iii) It shall have been in existence for at least 5 years;
(iv) It shall be earning profits for the last three years and its performance shall be satisfactory;
(v) The CRAR of the NBFC post investment in the IDF-MF shall not be less than the regulatory minimum prescribed for it;
(vi) The NBFC shall continue to maintain the required level of NOF after accounting for investment in the proposed IDF-MF;
(vii) There shall be no supervisory concerns with respect to the NBFC.