The Reserve Bank, on Wednesday, said non-bank financial companies (NBFCs) did not have to make provision for guaranteed portion of loans for low-income housing.
In case of NBFC—MFIs, if the advance covered by Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) guarantee becomes non-performing, no provision need be made towards the guaranteed portion, RBI said in a notification.
The amount outstanding in excess of the guaranteed portion should be provided for as per the guidelines on provisioning for non-performing advances, it added.
NBFC—MFIs may assign zero risk weight for the guaranteed portion, it said, adding, the balance outstanding in excess of the guaranteed portion would attract a risk-weight as per extant guidelines.
The CRGFTLIH for urban areas has been set up by the government in June 2012.
The fund trust is managed by the National Housing Bank.
