The Reserve Bank of India (RBI) on December 05, 2022, updated the Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021 which is applicable to Scheduled Commercial Banks, Regional Rural Banks, Primary (Urban) Co-operative Banks/State Co-operative Banks/ Central Co-operative Banks, All India Financial Institutions (NABARD, NHB, EXIM Bank, and SIDBI), Small Finance Banks, and All Non-Banking Finance Companies (NBFCs) including Housing Finance Companies (HFCs). Overseas branches of these lenders shall be permitted to:
a) Acquire only ‘not in default’ loan exposures from a financial entity operating and regulated as a bank in the host jurisdiction.
b) Transfer exposures ‘in default’ as well as ‘not in default’ pertaining to resident entities to a financial entity operating and regulated as a bank in the host jurisdiction.
c) Transfer exposures ‘in default’ as well as ‘not in default’ pertaining to non-residents, to any entity regulated by a financial sector regulator in the host jurisdiction.
