MUMBAI : Non-banking financial companies (NBFCs) on Friday requested the Reserve Bank of India (RBI) to allow them to draw-down from their reserves for making additional provision for expected losses due to covid-19 pandemic.
NBFCs appropriate pro Statutory and Other Reserves, and utilization of these reserves is governed by the statute requiring its creation. “We urge upon RBI to consider, as a one-time measure, to allow NBFCs to draw-down from their Reserves and adjust towards additional Expected Credit Losses (ECL) provision requirement, in excess of provision calculated as per normal Probability of Default (PD) and Loss Given Default (LGD)," Finance Industry Development Council (FIDC), a representative body of assets and loan