The RBI has turned down the request of non-banking financial companies (NBFC) to relax asset classification and provisioning norms.

This will give rise to lousy debt numbers of such para banks on technical grounds while standardised asset quality norms across banks and NBFCs. The para banks are now rapidly filling in the positions left vacant by the risk-averse banks, and their asset book is close to 20 per cent of banks’ total credit.

The NBFC lobby group Finance Industry Development Council (FIDC) approached the RBI to offer relaxation in the NPA norms, but the RBI has declined, media reported.

In November, Central Bank’s notification said NBFCs must recognise their debts as bad debts if they are not serviced for more than 90 days, bringing them in line with banks.