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Changes in Norms Under Shakti Kantha Das

The Reserve Bank of India (RBI) under Governor Shaktikanta Das took several actions between May and August 2019 to strengthen regulations for non-banking financial institutions and increase lending. Key moves included requiring large NBFCs to appoint a chief risk officer, implement liquidity coverage ratios, and relaxing debt restructuring norms to boost lending. The RBI also cut interest rates for the fourth time in a row in August 2019 to 5.40% in order to stimulate the economy.

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Sai Dinesh Bille
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134 views2 pages

Changes in Norms Under Shakti Kantha Das

The Reserve Bank of India (RBI) under Governor Shaktikanta Das took several actions between May and August 2019 to strengthen regulations for non-banking financial institutions and increase lending. Key moves included requiring large NBFCs to appoint a chief risk officer, implement liquidity coverage ratios, and relaxing debt restructuring norms to boost lending. The RBI also cut interest rates for the fourth time in a row in August 2019 to 5.40% in order to stimulate the economy.

Uploaded by

Sai Dinesh Bille
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Dear Students,

Below are the latest actions taken by RBI under leadership of Mr.Shaktikanta Das (RBI
Governor)
May 16, 2019
 RBI asked Non-Banking Financial Companies (NBFCs) with asset size of Rs. 5,000
crores must appoint a Chief Risk Officer
 The CRO is required to function independently so as to ensure highest standards of risk
management
 CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate
professional qualification and experience in the area of risk management.
May 23, 2019
 All non-deposit taking non-banking financial companies (NBFCs) with an asset size of
Rs 5,000 crore and above, and all deposit-taking NBFCs irrespective of their asset size,
have to maintain a liquidity buffer in terms of a Liquidity Coverage Ratio (LCR).
 Starting April 2020, NBFCs will have to maintain minimum of 60% of LCR as high
liquid assets which will be increased in a calibrated manner to 100% by April 2024.
May 29, 2019
 RBI allows Banks to use Aadhaar for Know Your Customer (KYC) with customer's
consent
 RBI specifies KYC norms to be followed by banks and other entities regulated by it for
various customer services, including opening of bank accounts
 KYC details basically enable banks and other regulated entities - including financial
institutions, NBFCs, payment system providers and agents of the Money Transfer
Service Scheme - to understand their customers and their financial dealings better. This,
in turn, helps them better manage their risks.
June 06, 2019
 RBI allows on-tap licensing of Small Finance Banks (SFBs) to drive financial inclusion
 Availability of on-tap licence for SFBs is positive, especially for entities operating in
the micro-finance segment, as this can improve their liability profile and provide them
with sustainable growth model
June 07, 2019
 RBI relaxes stressed asset norms. Three major changes were:

 The central bank has made it voluntary for lenders to take defaulters to the bankruptcy
court
 The framework now applies to a larger universe of lenders, which includes small banks
and non-banking finance companies (NBFCs).
June 10, 2019
 RBI relaxes norms for basic Savings Accounts
 Under this, Banks can provide cheque books and other facilities to basic account
holders
 The banks cannot ask the account holders to maintain any minimum balance in lieu of
such facilities
 There will be no limit on the number and value of deposits that can be made in a month
June 12, 2019
 RBI new debt restructuring norms
 The guidelines mandate lenders to keep additional provisioning of 20% if a resolution
plan is not implemented within 210 days from the date of default and 35% if not
implemented within 365 days of default
 This move may also help NBFCs along with banks
Aug 07, 2019

 RBI cuts repo rate by 35 bps. This is the fourth straight time that the RBI has cut
interest rates
 The short-term lending rate now stands at 5.40%
 Rate cuts alone cannot help India's economy unless the benefits are passed on to
consumers and corporate borrowers

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