FICCI writes to RBI seeking relaxed norms for NBFCs


The Federation of Indian Chambers of Commerce and Industry (FICCI) has written to the Reserve Bank of India (RBI) seeking relaxed borrowing measures for non-banking finance companies (NBFC). In a letter to RBI governor, Shaktikanta Das, FICCI said that NBFC – infrastructure finance companies (IFC) should be allowed to issue tax-free bonds. “IFCs should be allowed to issue tax-free bonds so that they are able to mobilise long-term financing and use the funds for infrastructure development. At least those IFCs which have been according Public Financial Institution (PFI) status, should be allowed to issue such tax-free bonds,” FICCI said. IFCs should be allowed to issue non-convertible debentures to retail investors, FICCI added. FICCI also sought relaxed investment guidelines for insurance companies to subscribe to bond issuances by IFCs with a credit rating of ‘A-’. Presently insurance companies can invest in infrastructure companies with a credit rating of ‘A’ and above. But they are not allowed to invest in debt instruments that have a credit rating lower that ‘AA’.


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