What changed
This master circular consolidates and updates earlier notifications (DFC(COC) No.108.ED(JRP)/97, DFC.120/ED(G)-98, DFC.121/ED(G)-98) on liquid asset maintenance and return specifications for NBFCs and RNBCs. It reaffirms that RNBCs must maintain liquid assets at 10% of deposits outstanding at the close of business on the last working day of the second preceding quarter. NBFCs (other than RNBCs) are exempt from the 5% requirement but must invest at least 15% of public deposits in unencumbered approved securities and term deposits. Quarterly returns must be submitted in duplicate within 15 days of the month succeeding the quarter, certified by an authorized official, to the relevant RBI regional office.
What it means for you
For NBFCs and RNBCs, this circular provides a single reference point for compliance with liquid asset requirements and return filing. RNBCs must ensure they hold 10% of their deposit base as liquid assets, calculated based on deposits two quarters prior. NBFCs (other than RNBCs) are exempt from the 5% approved securities requirement but must invest at least 15% of public deposits in unencumbered approved securities and term deposits. All entities must adhere to strict quarterly reporting timelines and submit returns to the correct RBI regional office, with certification by an authorized official.
What you must do
- Ensure RNBCs maintain liquid assets at 10% of deposits outstanding at the close of business on the last working day of the second preceding quarter.
- NBFCs (other than RNBCs) must invest at least 15% of public deposits in unencumbered approved securities and term deposits as specified.
- File quarterly returns (Form NBS-3 for NBFCs, Form NBS-3A for RNBCs) in duplicate within 15 days of the month following the quarter-end.
- Have the quarterly return certified and signed by an authorized official of the company.
- Submit the return to the Regional Office of Department of Supervision (Financial Companies Wing) of RBI under whose jurisdiction the registered office is located.
Who it affects
All Non-Banking Financial Companies (NBFCs) accepting public deposits (with specific liquid asset rules for RNBCs vs. other NBFCs), All Residuary Non-Banking Companies (RNBCs)
What is the liquid asset maintenance requirement for RNBCs?
RNBCs must maintain liquid assets equal to 10% of the deposits outstanding at the close of business on the last working day of the second preceding quarter.
What is the liquid asset requirement for NBFCs (other than RNBCs)?
NBFCs (other than RNBCs) are exempt from the 5% approved securities requirement but must invest at least 15% of public deposits in unencumbered approved securities and term deposits.
What is the deadline for filing the quarterly return?
The quarterly return must be submitted in duplicate within 15 days of the month succeeding the quarter to which it relates.
Where should the quarterly return be submitted?
The return should be submitted to the Regional Office of the Department of Supervision (Financial Companies Wing) of RBI under whose jurisdiction the registered office of the NBFC/RNBC is situated.