Regulatory Alerts2023-02-01
Added
DFIM Circular Letter No. 02: Issuance of Bond by NBFIs for collecting long term funds
Non-banking financial institutions are directed to avoid inter-bank transactions and instead raise long-term funds through bond issuance to mitigate liquidity risk and maintain independent liquidity. This directive addresses the practice of funding long-term lease operations with short-term sources, which has caused liquidity mismatches and payment difficulties for depositors. The instruction is issued under the authority of Section 18(c) of the Financial Institutions Act, 1993.
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