The Reserve Bank of India, on 31st December, 2019, has decided to extend the relaxation provided to Non-Banking Financial Companies (“NBFCs”) to securitise/assign their eligible assets.
RBI in its earlier notification dated November 29, 2018 has relaxed the Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity above 5 years to receipt of repayment of six monthly installments or two quarterly installments (as applicable), subject to the condition that the Minimum Retention Requirement (MRR) for such securitisation/assignment transactions shall be 20% of the book value of the loans being securitised/20% of the cash flows from the assets assigned.
The deadline has initially been extended to 31st December 2019 vide notification dated May 29, 2019. Therefore the above relaxation has now been extended till 30th June, 2020 from 31st December, 2019.
Click here to read the Notification.
