RBI extends relaxation on the Minimum Holding Period for originating NBFCs till 30th June, 2020; applicable for loans having maturity of more than 5 years

The Reserve Bank of India, through a notification dated 31st December, 2019, has decided to extend the relaxation provided to Non-Banking Financial Companies (“NBFCs”) to securitise/assign their eligible assets. The Minimum Holding Period requirement for originating NBFCs, in respect of loans of original maturity of more than 5 years has been relaxed. The relaxation is subject to the condition that the Minimum Retention Requirement (MRR) for such securitization / assignment transactions is 20% of the book value of the loans being securitized or 20% of the cash flows from the assets assigned.

The above relaxation has now been extended till 30th June, 2020 from 31st December, 2019.

Source: Reserve Bank of India

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