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JC - Legal Updates - New Guidelines expected for IDF-NBFCs, Financial Benchmark Administrators, and more..!

Legal Updates

11 Aug 2023

New Guidelines expected for IDF-NBFCs, Financial Benchmark Administrators, and more..!

Brief Overview:
 
RBI to soon release revised regulatory framework/directions relating to:

●   Financial Benchmark Administrators (FBA)

●   Infrastructure Debt Funds (IDF-NBFCs)

●   Responsible Conduct in Lending
 
Technical Details:
 
Pursuant to the Statement on Developmental and Regulatory Policies, RBI is slated to introduce the following:
 
1)  Framework for FBA
 
On review of the existing framework, it has now been decided to put in place a comprehensive, risk-based framework covering administration of all benchmarks related to foreign exchange, interest rates, money markets and government securities such as benchmarks on certificate of deposits (CDs) rates, repo rates, and FX Options Volatility Matrix as well as other benchmarks on government securities.
 
2)  Revised framework for NBFC-IDFs
 
The soon-to-be-issued revised framework envisages – (i) withdrawal of the requirement of a sponsor for the IDFs; (ii) permission to finance Toll Operate Transfer projects (ToT) as direct lenders, (iii) access to external commercial borrowings; and (iv) making tri-partite agreement optional for public private partnership (PPP) projects.
 
3)  Transparency in Interest Rate Reset of EMI based Floating Interest Loans
 
RBI has proposed to put in place a proper conduct framework to be implemented by all REs to address the issues faced by the borrowers with respect to the subject matter.
 
For further details, please see:
 
 
For any queries / clarifications, please feel free to ping us and we will be happy to chat:

●   Mr.Saurabh Sharma (saurabh.sharma@jclex.com)
●   Mr. Ankit Sinha (ankit.sinha@jclex.com)
●   Ms. Rupul Jhanjee (rupul.jhanjee@jclex.com)