India’s Leading BFSI Companies 2020

XXVI All NBFCs-ND-SI were advised to take appropriate action as envisaged under the interest subvention scheme for micro, small and medium enterprises (MSMEs) announced by Government of India on November 02, 2018, in which 2 per cent interest subvention for all GST registered MSMEs, on fresh or incremental loans will be given (This scheme will continue over 2018-19 and 2019-20 with SIDBI designated as the nodal agency for the purpose of channelizing of interest subvention to the various lending institutions). In January 2019, a one-time restructuring of existing loans to MSMEs that were in default but ‘standard’ as on January 1, 2019 was permitted without an asset classification downgrade. NBFCs-ND-SI in the category of ICCs would be eligible to apply for grant of authorized Dealer Category II license. All government-owned NBFCs-ND-SI and government-owned NBFCs-D have been brought under the Reserve Bank’s on-site inspection framework and off-site surveillance commencing from the inspection cycle 2018-19. The Ombudsman Scheme for NBFCs-D was extended to eligible NBFCs-ND, with an asset size of ` 100 crore or above with customer interface. The Reserve Bank front-loaded the increase in the facility to avail liquidity for liquidity coverage ratio (FALLCR) of 0.5 per cent each of banks’ NDTL scheduled for August 1 and December 1, 2019, respectively, for incremental credit given to NBFCs and HFCs, over and above credit outstanding to NBFCs and HFCs as on July 5, 2019. Other Measures announced in the Budget 2020-2021 • Proposal to reduce the limit for NBFCs to be eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security interest (SARFAESI) act 2002 from asset size of ` 500 cr to ` 100 cr, or loan size of ` 10 lakh to ` 50 lakh. • NABARD re-finance scheme to be further expanded to cover NBFCs and co-operatives that are active in agricultural lending. • Mechanism to be devised to enhance the liquidity-generating capabilities of the Partial Credit Guarantee Scheme for NBFCs which had been launched in FY20; Government to offer support by guaranteeing securities so floated. • Proposal to make amendments to the Factor Regulation Act 2011, to enable NBFCs to extend invoice financing to MSMEs through Trade Receivables electronic Discount System (TReDS). Dun & Bradstreet