What changed
Previously, NBFCs not accepting/holding public deposits with assets of Rs 500 crore and above as on March 31, 2004 had to submit quarterly returns. Now, the threshold is lowered to Rs 100 crore and above, and returns must be filed monthly within 7 days of the month following the reporting month. The first monthly return may be submitted for September 2005 by October 7, 2005. Additionally, companies must clearly indicate their business classification (e.g., loan, investment, hire purchase) and report new details on capital market exposure, including financing of IPOs, gross sales and purchases for all items, and guarantees issued on behalf of share brokers.
What it means for you
This shift to monthly reporting gives RBI a faster, more granular view of large NBFCs' financial health, enabling quicker risk detection. For NBFCs, it increases compliance frequency and detail, especially around capital market activities. Non-submission will invite penal action, so lenders must strengthen internal reporting systems to meet the 7-day deadline.
What you must do
- Ensure your NBFC with assets of Rs 100 crore and above files the monthly return within 7 days of the month following the reporting month.
- Update your company profile to clearly indicate business classification (loan, investment, hire purchase, leasing, etc.) in the return.
- Prepare to report additional capital market exposure details: financing of IPOs, gross sales and purchases for all items, and guarantees issued on behalf of share brokers.
- Submit the first monthly return for September 2005 by October 7, 2005, and the provisional return for March 2005 as per the above stipulation.
- The return certified by statutory auditors may be submitted within 7 days of finalisation of final accounts.
Who it affects
NBFCs not accepting or holding public deposits with assets of Rs 100 crore and above, Regional Offices of RBI receiving these returns, Statutory auditors of affected NBFCs
Which NBFCs are now required to file monthly returns?
All NBFCs that do not accept or hold public deposits and have an asset size of Rs 100 crore or more must file monthly returns. This expands the earlier requirement that applied only to those with assets of Rs 500 crore or more.
What is the deadline for submitting the monthly return?
The return must be submitted within 7 days of the month following the reporting month. For example, the return for September 2005 is due by October 7, 2005.
What new information must be reported in the return?
Companies must now clearly indicate their business classification (e.g., loan, investment, hire purchase) and provide additional details in Part VIII on capital market exposure, including financing of IPOs, gross sales and purchases for all items, and guarantees issued on behalf of share brokers.