Draft circular on declaration of dividend by NBFCs issued by RBI
Reserve Bank of India has issued draft circular on declaration of dividend by non-banking financial companies (NBFCs). Accordingly, deposit-taking NBFCs and systemically important non-deposit-taking NBFCs must have their net non-performing assets below six percent and a capital adequacy ratio of at least 15 percent for the last three years, including the accounting year for which it proposes to declare dividend. RBI has added that non-systemically important, non-deposit-taking NBFCs should have a leverage ratio of less than seven while core investment company – CIC should have Adjusted Net Worth (ANW) of at least 30 percent of its aggregate risk-weighted assets on balance sheet. The apex bank has invited public comments on the draft circular, which need to be submitted by 24th December.