What changed
RBI updated its master circular on the Miscellaneous Non-Banking Companies Directions, 1977, to include instructions up to June 30, 2009. The circular supersedes the earlier Directions contained in Notification No.DNBC.21/DG(S)-73 dated August 23, 1973, as amended from time to time.
What it means for you
Miscellaneous non-banking companies must comply with the consolidated directions, which govern prize schemes, chit funds, and similar arrangements. The circular provides a single source for regulatory requirements, reducing ambiguity for these companies.
What you must do
- Review the updated master circular to ensure all instructions are incorporated into compliance frameworks.
- Verify that any miscellaneous non-banking company you deal with adheres to the 1977 Directions, especially regarding fund collection and prize distribution.
- Update internal policies to reference the consolidated circular for regulatory reporting and supervision.
Who it affects
Miscellaneous non-banking companies, Banks and lenders dealing with such companies, RBI's Department of Non-Banking Supervision
What types of companies are covered under this master circular?
It covers financial institutions that are companies collecting money through subscriptions or contributions for prize schemes, savings plans, or chit-like arrangements, including those operating in Jammu and Kashmir.
Does this circular replace all previous directions?
Yes, it consolidates and updates all instructions from earlier notifications, superseding the 1973 Directions and providing a single reference up to June 30, 2009.
What should banks do to ensure compliance with this circular?
Banks should review the master circular, update their compliance checklists, and ensure any miscellaneous non-banking company they transact with follows the Directions, particularly on fund utilization and prize distribution.