What changed
RBI mandated that all NBFCs with FDI, whether under automatic or approval route, must submit a half-yearly compliance certificate from their Statutory Auditors. The certificate must be submitted within one month of the half-year ending September and March to the respective RBI Regional Office.
What it means for you
NBFCs with foreign investment now have a recurring compliance obligation to demonstrate adherence to FDI norms, including minimum capitalisation requirements. This ensures ongoing regulatory oversight and reduces the risk of non-compliance. Lenders must factor this into their audit and reporting schedules to avoid delays or penalties.
What you must do
- Arrange for your Statutory Auditor to issue a half-yearly certificate confirming FDI compliance, covering the periods ending September and March.
- Submit the certificate to the RBI Regional Office where your NBFC's head office is registered, within one month of each half-year end.
- Review your NBFC's FDI terms and minimum capitalisation norms to ensure ongoing compliance before each certificate is prepared.
Who it affects
All Non-Banking Financial Companies (NBFCs) with foreign direct investment (FDI), Statutory Auditors of NBFCs with FDI, RBI Regional Offices handling NBFC registrations
What is the deadline for submitting the half-yearly FDI compliance certificate?
The certificate must be submitted within one month from the close of the half-year, i.e., by end of October for the September half-year and by end of April for the March half-year.
Which RBI office should receive the certificate?
The certificate must be sent to the Regional Office of RBI in whose jurisdiction the head office of the NBFC is registered.
Does this apply to NBFCs with FDI under the automatic route as well?
Yes, the requirement applies to all NBFCs having FDI, whether under the automatic route or the approval route.