Draft circular on declaration of dividend by NBFCs issued by RBI

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.

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