RBI delays new bad loan rules for non-banks

The RBI has extended the roll-out of new bad loan norms for non-banking finance companies (NBFCs) by six months.

The norms pertain to upgrading NPAs (non-performing assets) to standard by NBFCs. In November, the RBI had said the new norms will be effective March 31, 2022, which has now been postponed to September.

According to an India Ratings report, bad loans for NBFCs are likely to increase by one-third due to the new norms. Earlier, lenders would upgrade accounts when the borrowers get back on track with their instalments. The new rules said that the loan could not be upgraded until all the money due was recovered.

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