What changed
RBI introduced a new quarterly monitoring framework for non-deposit taking NBFCs with asset size of Rs 50 crore and above but less than Rs 100 crore. These NBFCs must now submit a detailed quarterly return online covering financial parameters like assets, liabilities, sources and application of funds. The first return is for the quarter ended September 2008, due by first week of December 2008.
What it means for you
Mid-sized NBFCs now face enhanced regulatory scrutiny with mandatory quarterly reporting, increasing compliance burden. Banks lending to these NBFCs should expect more timely and granular financial data from their borrowers. This move signals RBI's intent to tighten oversight on the NBFC sector, potentially leading to stricter credit assessments by lenders.
What you must do
- Identify all non-deposit taking NBFC borrowers with asset size between Rs 50 crore and Rs 100 crore in your portfolio.
- Advise these NBFC clients to prepare for quarterly online filing with their regional RBI office within one month of quarter-end.
- Update internal credit monitoring systems to incorporate the new quarterly return data for better risk assessment.
- Ensure your NBFC clients are aware of the first deadline: December 2008 for September 2008 quarter.
Who it affects
Non-deposit taking NBFCs with asset size Rs 50 crore to Rs 100 crore, Banks and financial institutions lending to such NBFCs, RBI's Department of Non-Banking Supervision
Which NBFCs are covered under this new monitoring framework?
Non-deposit taking NBFCs with asset size of Rs 50 crore and above but less than Rs 100 crore are required to file the quarterly return.
What is the deadline for submitting the first quarterly return?
The first return for the quarter ended September 2008 must be submitted by the first week of December 2008.
How should the return be filed?
The return must be filed online with the Regional Office of the Department of Non-Banking Supervision where the NBFC is registered, within one month from the close of each quarter.