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RBI:- Guidelines on Lending against Shares carried out by NBFC

RBI has come out with the set of guidelines on lending against shares carried out by NBFCs. At present, there are no specific instructions apart from the general prudential regulation applicable to all NBFCs. Accordingly, NBFCs lending against collateral of shares shall Maintain an LTV ratio of 50% and accept only Group 1 securities as collateral for loans of value more than Rs. 5 lakh, subject to review by the Bank. Further all NBFCs with asset size of Rs.100 crore and above shall report on-line to stock exchanges, information on the shares pledged in their favour, by borrowers for availing loans.