Industry bodies urge RBI to scrap daily loan asset classification norm

rbi, reserve bank of india, confederation of indian industries, npa, npas

Top industry bodies are seeking the scrapping of the Reserve Bank of India’s direction on loan asset classification by non-banking finance companies (NBFCs) on a daily basis as the rule could cripple the small and medium enterprises segment that is just limping back to normalcy after the Covid impact.

The Confederation of Indian Industries (CII) and the Associated Chambers of Commerce and Industry of India (Assocham) are writing to the regulator to review the norm which asks NFBCs to classify loans based on daily repayments.

In their letter to the RBI the industry bodies have argued that the strict day-to-day payments based classification would be hard to implement for the borrowers serviced by them as their cash flows and supplies are haphazard. These borrowers make lump sum payments.

“Our main point is that we mostly serve small borrowers, truck drivers, light commercial vehicles owners or even farmers. These people do not have a steady income stream like salaried people,” said a person familiar with the development. “As a result, payments do not often come on or before the due date, so we give them some leeway, like paying before the end of the month. The strict classification on par with banks will derail this system and could put many borrowers in trouble.”

rbi, reserve bank of india, confederation of indian industries, npa, npas

In a clarification earlier this month, RBI said loan accounts have to be classified as NPAs unless the entire arrears of interest and principal are paid by the borrower. NBFCs have also been asked to specifically mention the exact due date of loan accounts and the break-up of the principal as well as interest. These norms have now brought loan classification by NBFCs on par with banks and is yet another step by the RBI to tighten regulations on NBFCs although they serve a different set of clients. The changes will be effective from next fiscal year.

Crisil said that the impact of the new RBI norms on unsecured loan NPA is expected to be in the range of 1.5% to 3%, for MSME finance it is expected to be in the range of 1% to 3%, and 1% to 2% for vehicle finance.

Industry leaders are hoping that the central bank will at least give them some more time or introduce the new norms in a gradual or phased manner.

News Related

OTHER NEWS

People entering Sikkim need to produce negative RT-PCR test report

The Sikkim Government has made it mandatory for all persons entering the Himalayan state to produce a negative RT-PCR report conducted within 72-hours prior to the date of entry. A ... Read more »

SC issues notices to Centre, election panel on PIL against poll freebies

The Supreme Court on Tuesday sought responses from the Centre and the Election Commission on a PIL seeking a direction to seize the election symbol or de-register a political party ... Read more »

SBI Card shares jump nearly 5% post earnings announcement

New Delhi, Shares of SBI Cards and Payment Services on Tuesday gained nearly 5 per cent after the firm reported an 84 per cent jump in net profit for December ... Read more »

After 3x jump in Q3 net, analysts see up to 45% upside in Axis Bank

NEW DELHI: Axis Bank‘s three-fold jump in the December quarter net profit sent its shares up 5 per cent amid wild swings in the market on Tuesday. The stock was ... Read more »

UP Assembly Polls: Congress leader and ex-Union minister RPN Singh likely to join BJP

Senior Congress leader and former Union minister RPN Singh will likely join the Bharatiya Janata Party (BJP) ahead of next month’s assembly polls in Uttar Pradesh (UP), according to reports. Singh, ... Read more »

Alarm bells! One out of every 3 debutants of 2021 trading below listing price

India’s new stock listings are losing their edge as a worsening outlook for global equities leads investors to take profit from high-profile consumer technology stocks that debuted with inflated valuations. ... Read more »

Odisha registers 206 new Covid-19 cases, 2 fresh fatalities

Odisha‘s COVID-19 tally rose to 10,45,862 on Tuesday as 206 more people tested positive for the infection, 21 more than the previous day, while two fresh fatalities pushed the state’s ... Read more »

Don't want people's livelihood to be affected, COVID curbs to be eased as soon as possible: Arvind Kejriwal

File image of AAP Chief Arvind Kejriwal (Source: PTI) Delhi Chief Minister Arvind Kejriwal on Tuesday said that his government does not want livelihood of people to be affected and ... Read more »

Pencilton launches debit card with NCMC for teens in partnership with Transcorp

Pencilton, a teen-focused fintech company, has launched PencilCard, a debit card with NCMC for teens. PencilCard is an NCMC-compliant (National Common Mobility Card) RuPay debit card specially designed for the ... Read more »

Supreme Industries tumbles 6% as Q3 profit declines 21% YoY

NEW DELHI: Shares of Supreme Industries gave up 5.8 per cent in early trade Tuesday as the plastic products maker reported a 21.31 per cent decline in consolidated profit to ... Read more »

China drafts new rules to allow gene edited crops to overhaul seed industry

China has published trial rules for the approval of gene-edited plants, paving the way for faster improvements to crops. The new guidelines, published by the Ministry of Agriculture and Rural ... Read more »

Craftsman Automation drops 13% after flop Q3 show

New Delhi: Shares of Craftsman Automation plunged as much as 13 per cent in early trade on Tuesday as the company posted a poor set in the quarter ended December ... Read more »

Indiamart Intermesh plunges 9% as e-commerce player posts fall in Q3 profit

NEW DELHI – Shares of Indiamart Intermesh plummeted 9 per cent in early trade on Tuesday as the B2B e-commerce firm posted a 12.4 per cent decline in consolidated net ... Read more »

Shriram Transport Fin jumps 4% as investors cheer 11% rise in Q3 net interest income

NEW DELHI – Shares of Shriram Transport Finance Company gained 4 per cent in early trade Tuesday even as the non-bank financing company reported a decline in standalone profit as ... Read more »

Zomato trading at heavy discount to listing price: Should you grab a bite?

NEW DELHI: Despite a 46 per cent drop over its peak, analysts largely have a mixed view on whether Zomato has entered into a ‘buy’ zone now. Foreign brokerage JPMorgan ... Read more »

Vodafone Idea gains 3% as management says may hike mobile services rates

NEW DELHI – Shares of Vodafone Idea added 2.7 per cent in early trade Tuesday after the beleaguered telecom operator said that it may raise mobile services rates this year ... Read more »

Assam and Nagaland opt for out-of-court settlement in decades-old border dispute

Nagaland Chief Minister Neiphiu Rio said that Assam and Nagaland are ready for out-of-court settlement for several decade old border dispute. Both the states have agreed to share royalty from ... Read more »

Active Covid-19 cases in India declines to 1,44,845; lowest in 260 days

India saw a single-day rise of 10,853 COVID-19 infections, which took the country’s total tally of cases to 3,43,55,536, while active cases have declined to 1,44,845, the lowest in 260 ... Read more »

Axis Bank gains as lender's Q3 profit zooms three-fold, beats estimates

NEW DELHI – Shares of Axis Bank climbed 1.6 per cent in early trade Tuesday as the private lender’s consolidated net profit for the December quarter zoomed nearly three-fold to ... Read more »

Freefall! Sensex slips below 57,000 as bears show no mercy

NEW DELHI: The bears showed no mercy on Tuesday, as bloodbath continued on Dalal Street, ahead of the two-day Fed policy review starting later in the day. Sensex plunged over ... Read more »

MC Election Update Today January 25: Congress releases 2nd list for Uttarakhand polls, fields Harish Rawat from Ramnagar

Punjab’s Chief Electoral Officer S Karuna Raju has said only two persons can accompany the candidate while filing nomination papers at the office of the returning officer. (Representative image) Congress ... Read more »

Uttar Pradesh becomes first state to administer 25 crore Covid vaccine doses

Uttar Pradesh has become the first state in India to have administered more than 25 crore doses of Covid vaccines. Nearly 25.05 crore out of total 162.7 crore doses administered ... Read more »

Indian IT firms gear up to tap metaverse opportunities

India’s top software exporters are racing to prepare for a surge in demand for technology services aimed at the metaverse, which is widely regarded as the next phase of the ... Read more »

PM Narendra Modi to interact with BJP workers today

PM Narendra Modi (File image) Prime Minister Narendra Modi will interact with BJP workers from across the country via NaMo app today. The interaction comes in the run-up to the ... Read more »

Risk-off sentiment intensifies as Sensex records worst day in 3 months

Indian equities plummeted 2.6%, posting the biggest single-day drop in three months, amid a slide in stock markets as risk-off sentiment intensified across global financial markets on Monday. Anxiety that ... Read more »

Stocks in the news: Axis Bank, Maruti, Voda Idea, SBI Cards and IEX

Nifty futures on the Singapore Exchange traded 86.5 points, or 0.51 per cent higher at 16,970.50, signaling that Dalal Street was headed for a negative start on Tuesday. Here are ... Read more »

HC stays trial court proceedings against ex-SBI chief Pratip Chaudhuri

The Rajasthan High Court on Monday stayed lower court proceedings against former State Bank of India (SBI) chairman Pratip Chaudhuri and others in a case of cheating. Chaudhuri was arrested ... Read more »

Hero Fincorp to raise Rs 2,000 cr for growth

Hero Fincorp could raise ₹2,000 crore equity funding from existing and new investors to create a capital buffer for its business, according to people familiar with the matter. As part ... Read more »

Centre mulls panel to explore Scheduled Caste benefits for Muslim, Christian dalits

The Centre is exploring formation of a national panel to examine whether Dalits converted to Christianity should be given Scheduled Caste status. An inter-ministerial discussion is underway to elicit views ... Read more »

Bharti Airtel board meet on January 28 to explore fundraise via preferential issue

Bharti Airtel, India’s second largest telco, has said its board will meet on January 28, to consider raising funds via a preferential share issue to investors other than its promoter ... Read more »

Vi shares fall 8% as losses widen and user base shrinks

Mumbai: Shares of Vodafone Idea (Vi) slumped by nearly 8% on Monday, on the back of telco‘s widening losses and rapidly falling user base. The operator has allayed concerns of ... Read more »

HDFC Asset Management's PAT falls 3% in Q3, revenue up 14%

Mumbai: HDFC Asset Management’s profit after tax (PAT) slipped 3% to ₹359.7 crore in the December quarter, as against ₹369.2 crore in the same period a year ago. Revenue from ... Read more »

Two recent buyouts to help RIL challenge Nykaa's turf

Bengaluru/New Delhi: Reliance Industries Ltd. is preparing to launch its omnichannel beauty platform as the Mumbai-based conglomerate’s two recent acquisitions work in tandem to make it operational, two people aware ... Read more »

How big investors shuffled their folios in December quarter

Well-known investors shuffled their portfolios in the December quarter as the stock market swung amid growing uncertainty over liquidity tapering by central banks, mainly the US Federal Reserve, according to ... Read more »

More selloff likely if Nifty breaches 17,000 support level

Mumbai: Several technical indicators are flashing red after the benchmark indices fell 2.6% on Monday amid rising concern over faster-than-expected rate hikes by the US Federal Reserve. If the Nifty ... Read more »

SC stays SAT's remark against Sebi officer

Mumbai: The Supreme Court on Monday stayed the Securities Appellate Tribunal’s ‘judicial dishonesty’ remark against an adjudication officer of the Securities and Exchange Board of India for the alleged 10-year ... Read more »

Buying the dip? Avoid lump-sum plays into equities

Mumbai: Sharp declines in the stock market are usually considered to be opportunities to pick up future winners but the recent sell-off might not still be the best time to ... Read more »

Half of BSE500 companies, including top stars, slip below 200-DMA

Mumbai: Nearly half of the BSE500 stocks have slipped below their 200-day moving average (DMA) after the week-long sell-off triggered by sharp foreign outflows amid rising inflation globally. There is ... Read more »

Be on guard, dip in Covid cases could be due to fewer tests, less reporting

India’s Covid-19 cases continued to decline on Monday, but experts believe reduced tests and considerable proportion of persons opting for self-testing at home and not reporting it could be behind ... Read more »

AK 203 deal: Initial batch of 70,000 rifles delivered to armed forces by Russia

The armed forces have received the first batch of 70,000 rifles from Russia as part of a larger contract to manufacture the AK 203 assault rifles in India. The initial ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic