Reporting of Information on Investment in Commercial Papers and Unhedged Foreign Currency Exposures of the Borrowers to Credit Information Companies

All Banking Updates

RBI/2015-16/432
DBR.CID.BC. 107/20.16.056/2015-16

June 23, 2016

All Scheduled Commercial Banks
All India Financial Institutions
Credit Information Companies

Dear Sir / Madam

Reporting of Information on Investment in Commercial Papers and Unhedged Foreign Currency Exposures of the Borrowers to Credit Information Companies

Please refer to our circular DBOD.No.CID.BC.127/20.16.056/2013-14 dated June 27, 2014 advising banks to implement certain recommendations of the Committee to Recommend Data Format for Furnishing of Credit Information to Credit Information Companies (Chairman: Shri Aditya Puri) constituted by the Reserve Bank of India (RBI).

2. The recommendations that remain to be implemented relate to reporting of information concerning (i) investment of banks and All India Financial Institutions (AIFIs) in Commercial Papers (CPs) – Recommendation No.8.6, and (ii) Unhedged Foreign Currency Exposures (UFCE) of borrowers of banks and AIFIs – Recommendation No.8.14. The feasibility and operationalization of the collection and dissemination of information relating to these two items were examined in depth by the Technical Group on Credit Information set up by RBI and coordinated by CIBIL1.

It has been decided to capture the information on CPs and UFCE taking into account the inputs provided by the Technical Group.

3. The information on CPs issued by the companies shall be reported on a monthly basis to all the four credit information companies (CICs) by the bank which has been designated as the Issuing and Payment Agent (IPA) for the particular CP issue. However, if there are multiple IPAs for a single CP issue, they shall report to the CICs the details pertaining to the portion of the issue which is with them. This information shall be reported in the Commercial Data format in the fields given in the Annex. The IPA shall also report any default in the redemption of the relevant CP issue. It is clarified that the investing credit institutions need not report the information on CPs to the CICs.

4. The information regarding UFCE of individual borrowers shall be reported on a quarterly basis to all the four CICs by the lending bank (in the case of solo lenders) /consortium leader (in the case of consortium arrangements)/largest lender (in the case of multiple lending arrangements). This information shall be reported in the Credit Facility (CR) Segment of Commercial Data format in the fields given in the Annex.

5. The reporting requirements set out above shall be effective from July 1, 2016 i.e. from the credit information reports showing the position for the month of June 2016.

6. These instructions are being issued under sub-section (1) of Section 11 of Credit Information Companies (Regulation) Act, 2005.

Yours faithfully

(Rajinder Kumar)
Chief General Manager


Annex

Format for reporting information on investment in Commercial Papers and
Unhedged Foreign Currency Exposures of the borrowers to
Credit Information Companies

“CP” proposed Fields Available Field in Commercial Data Submission format Update in the description column of the format, in case of commercial paper
Name of CP issuer BS Segment – Field No. 4. Field Name: Borrower’s Name “Name of the CP Issuer”
CP Amount CR Segment – Field No. 5. Field Name: Sanctioned Amount/ Notional Amount of Contract “Amount of CP” to be given
Issue Date CR Segment – Field No. 4. Field Name: Facility / Loan Activation / Sanction Date “Issue Date” to be given
Maturity Date CR Segment – Field No. 13. Field Name: Loan Expiry / Maturity Date “Maturity Date” to be given
Name of CRA BS Segment- Field No. 24. Field Name: Assessment Agency / Authority “Name of CRA” to be reported
Rating Agency BS Segment – Field No. 23. Field Name: Credit Rating “Rating Assigned” to be reported
Amount of Default CR Segment – Field No. 17. Field Name: Amount Overdue / Limit Overdue “Amount of Default” to be given
“UFCE” proposed Fields Available Field in Commercial Data Submission format Update in the description column of the format, in case of commercial paper
UFCE Amount CR segment – Field No.44 Field newly added Unhedged Foreign currency exposure (UFCE) Amount in Indian rupees
UFCE Date CR segment – Field No.45 Field newly added Date of reporting of UFCE

1 Technical Group on Credit Information coordinated by CIBIL was set up by RBI based on recommendations of Aditya Puri Committee on Data Format for Furnishing of Credit Information to Credit Information Companies to review and suggest improvements to data formats. It has representation from all categories of banks, IBA, NBFCs and the CICs.

RBI decides to simplify and rationalise the process of registration of new NBFCs

All Banking Updates

In order to make the process of registration of new NBFCs smoother and hassle free, the application form for registration of new NBFCs and the checklist of documents to be submitted have been revised. The number of documents to be submitted by the NBFC applicants has been reduced from existing set of 45 documents to 7-8 in the revised process.

Secondly, from now onwards, there would be two different types of applications for non-deposit taking NBFCs (NBFC-ND) based on Sources of Funds & Customer Interface as follows:

  1. Type I – NBFC-ND not accepting public funds1/ not intending to accept public funds in the future and not having customer interface2/ not intending to have customer interface in the future

  2. Type II – NBFC-ND accepting public funds/ intending to accept public funds in the future and/or having customer interface/intending to have customer interface in the future

The processing of cases for Type I – NBFC-ND applicants would be on fast track mode. As these companies will not have access to public fund and will not have customer interface, they will be subjected to less intensive scrutiny / due diligence. However, CoR issued to Type I – NBFC-ND companies will be conditional. These companies will be prohibited from accessing public funds and having customer interface. In case these companies intend to avail public fund or intend to have customer interface in the future, they are required to take approval from Reserve Bank of India, Department of Non-Banking Regulation.

Following forms have been revised and uploaded on the RBI website-

  1. Application form

  2. Documents required for registration as Type I – NBFC-ND

  3. Documents required for registration as Type II – NBFC-ND (including new applications of NBFC-MFI, NBFC-factor, NBFC-IDF)

Application form has been changed in the online COSMOS Application of the Reserve Bank of India, except in the case of CIC-ND-SIs where a separate application form has been prescribed. The application form mentioned above shall be applicable to new applications of Type I – NBFC-ND and Type II – NBFC-ND (including NBFC-MFI, NBFC-Factor and NBFC-IDF).

Furthermore, with the aim to centralise the process, the application for new NBFCs may be submitted to Central Office, Department of Non-Banking Regulation directly at the following address:

Chief General Manager
Department of Non-Banking Regulation
Reserve Bank of India
Centre I, World Trade Centre
Mumbai-400 005

It is further advised that the checklists mentioned are indicative and not exhaustive. The Reserve Bank, may, if necessary, call for any further documents to satisfy itself on the eligibility of the company seeking registration as NBFC. In the event of the Reserve Bank calling for further documents in addition to those mentioned in the checklist, the applicant company must respond within a stipulated time of one month.

Background:

It may be recalled that in the First Bi-monthly Monetary Policy Statement – 2016-17, it was stated that in order to make the process of registration of new NBFCs smoother and hassle free, it has been decided to simplify and rationalise the process of registering new NBFCs. The new application forms will be simpler and the number of documents required to be submitted will be reduced to a minimum.

Ajit Prasad
Assistant Adviser

Press Release : 2015-2016/2935


1 “Public funds” shall include funds raised either directly or indirectly through public deposits, commercial paper, debentures, inter-corporate deposits and bank finance but excludes funds raised by issue of instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue as defined in Regulatory Framework for Core Investment Companies issued vide Notification No. DNBS (PD) CC.No. 206/03.10.001/2010-11 dated January 5, 2011.

2 “Customer interface” means interaction between the NBFC and its customers while carrying on its NBFI business as defined in Non-Systemically Important Non-Banking financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 issued vide Notification No. DNBR. 008/CGM (CDS) -2015 dated March 27, 2015.