RBI tightens NBFC funding norms
The RBI has tightened the norms for investments from grey or blacklisted Financial Action Task Force (FATF) jurisdictions into non-banking finance companies (NBFCs) which could limit investments made by Mauritius-based entities in them.
In a notification on Friday, the central bank said investors in NBFCs from countries that do not comply with the FATF regulations should not be allowed to hold a direct or indirect stake of more than 20 per cent in the shadow banks. This limit takes into account potential voting power which arises from instruments convertible into equity.
The FATF — an intra-governmental organisation headed by the Organisation for Economic Co-operation and Development — puts out black and grey lists of countries that are not fully co-operating on money laundering and the financing of terrorism. While the blacklist has two nations, the grey list has 15 countries, including Mauritius.
Urban co-op banks
The RBI has constituted a panel to draw up a vision document to strengthen urban co-operative banks (UCBs) and explore the potential of consolidation in the sector. The committee will be headed by former RBI deputy governor N.S. Vishwanathan.