Guarantees for NBFC-UL Credit Risk Transfer Must Be Direct, Explicit, Irrevocable, and Unconditional | RBI Clarifies
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- Last Updated on 17 January, 2024
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Circular No. RBI/2023-24/112 DOR.CRE.REC.70/21.01.003/2023-24, Dated 15.01.2024
In order to ensure uniformity and consistency in computation of concentration norms among NBFCs, RBI has decided that NBFC-Base Layer shall put in place an internal Board approved policy for credit/investment concentration limits for both single borrower/party and single group of borrowers/parties. Further, it has been clarified that to be eligible as a credit risk transfer instrument, guarantees shall be direct, explicit, irrevocable and unconditional.
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