tnnmumbai the reserve bank of india rbi on friday announced a revised regulatory framework for nonbanking finance companies nbfcs which tightens norms on capital and bad loan recognition under the revised framework there will be many more categories of nbfcs according to their activity with the rules getting more stringent with scale the rules also cap nbfc lending for ipo financing at rs 1 crore per borrowerunder the new norms the rbi will hike the net owned fund requirement for all nbfcs to rs 10 crore they will also have to recognise loans overdue for over 90 days as nonperforming assets npas by march 2026 and over 150 days by march 2024earlier in the day rbi deputy governor m rajeshwar rao said that the failure of any large nbfc or housing finance company hfc may translate into a risk to its lenders with the potential to create a contagion also the failure of any large and deeply interconnected nbfc can disrupt the operations of the small and midsized nbfcs through a domino effect by limiting their ability to raise funds speaking at a cii event rao said that the liquidity stress in the sector triggered by the failure of a core investment company ilfs broke the myth that nbfcs do not pose any systemic risk to the financial systemrao said that nbfcs would be categorised into three categories the base layer top layer and middle layer in terms of the new framework the base layer will include nondeposittaking nbfcs with assets below rs 1000 crore these could include peertopeer lending platforms account aggregators nonoperating financial holding companies and other finance companies that do not avail public funds and do not have any customer interfacethe middle layer would include deposittaking nbfcs with assets over rs 1000 crore and would include primary dealers infrastructure debt funds core investment companies hfcs and infrastructure finance companies the upper layer will be specifically identified by the rbi as warranting enhanced regulatory requirements and would include the top 10 nbfcs in the countryrao also cautioned on the malpractices of digital lenders while the benefits accruing from digital financial services is not a point of debate the business conduct issues and governance standards adopted by such digital lenders have shaken the trust reposed in digital means of finance in india we were and are inundated with the complaints of harsh recovery practices breach of data privacy increasing fraudulent transactions cybercrime excessive interest rates and harassment said rao