Non-Banking Financial Companies:
The Reserve Bank of India extended the timeline by six months for Non-Banking Financial Companies to adhere to the new NPA recognition norms.
- Earlier the regulator had set March 31 deadline for non-bank lenders to upgrade NPAs only after all arrears and principal dues are paid. It said that NBFCs will have time till September 30 to put in place the necessary systems to implement this provision.
- The RBI also clarified that loans classified as NPA will be upgraded to standard category only if all dues are paid.
- In case of borrowers having more than one credit facility from a lending institution, loan accounts shall be upgraded from NPA to standard asset category only upon repayment of entire arrears of interest and principal pertaining to all the credit facilities.
- The new RBI rules require NBFCs to treat such accounts as NPA until the borrower updates the account by paying all the EMIs due.