Government-backed non-banking finance companies with loan assets exceeding Rs 1 lakh crore may approach the Reserve Bank of India for exemption from the proposed upper layer NBFC framework, according to three people aware of the matter.
The move follows concerns that state-run lenders such as Power Finance Corp, REC and Indian Railway Finance Corp could breach the 25% single-group borrower exposure limit if they are brought under the upper layer category.
The RBI, in its draft norms on the identification of upper layer NBFCs, has proposed including government-run NBFCs in the category. At present, large state-run NBFCs remain classified under the middle layer and are exempt from the upper layer framework.
The proposed changes could affect lending exposure limits for these institutions, which finance large infrastructure and government-linked projects.
Concerns Raised
PFC Chairman and Managing Director Parminder Chopra said on Wednesday that the company had raised concerns over the RBI's proposed norms.
The central bank had invited public comments on the draft framework until May 4.
There are currently 15 NBFCs in the RBI's upper layer list. Tata Sons has applied to the RBI for deregistration as a core investment company.
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