Comments
The Reserve Bank of India has, for now, relaxed the norm that requires non-banking finance companies (NBFCs) to have a minimum gap of six months between two non-convertible debentures (NCDs) issues.
On June 27, the RBI had said there should be a minimum time gap of at least six months between two private NCD placements.
“To facilitate the process of moving into a more robust asset-liability management (environment) in a non-disruptive manner, it has been decided that the instruction with regard to minimum gap between two successive issuances of privately placed NCDs may not be operationalised immediately,” the apex bank said in a statement.
A decision on the appropriate minimum time gap would be taken by RBI in due course, the notification said.
Resource planning
The central bank also asked NBFCs to put in place a resource planning and raising schedule before September-end. The RBI clarified that the freedom currently available to NBFCs to raise funds through NCDs without any restriction had resulted in inadequate resource planning and higher transaction costs.
One of the main objectives of the restriction between two NCD issues was to promote discipline in resource planning and raising, it said.
Given NBFCs’ dependence on bond markets to raise funds, this relaxation in guideline is likely to benefit the larger players in the sector.
>satyanarayan.iyer@thehindu.co.in
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.