What changed
RBI issued a consolidated version of the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms Directions, 2007, updated to include all amendments up to June 30, 2012. This replaces the earlier 1998 prudential norms and brings all current instructions under one notification. The updated text was placed on the RBI website for easy access.
What it means for you
NBFCs and RNBCs now have a single, authoritative document covering all prudential requirements, reducing the need to track multiple circulars. Compliance teams must ensure their internal policies align with the consolidated norms, especially on asset classification, provisioning, and capital adequacy. This consolidation simplifies regulatory reporting and audit processes.
What you must do
- Review the consolidated notification to ensure your NBFC's policies match the updated prudential norms.
- Update internal manuals and training materials to reference the 2007 directions as amended up to June 2012.
- Verify that your asset classification and provisioning practices comply with the consolidated requirements.
- Ensure your statutory auditor is aware of the updated notification for the annual certificate submission.
Who it affects
All deposit-accepting NBFCs (excluding mutual benefit financial companies and government companies), Residuary Non-Banking Companies (RNBCs), Statutory auditors of NBFCs and RNBCs, Compliance and risk management teams at NBFCs
Does this circular introduce new prudential norms?
No, it consolidates all existing amendments to the 2007 directions up to June 30, 2012, into one document. No new requirements were added.
Which NBFCs are exempt from these directions?
Government companies as defined under Section 617 of the Companies Act, 1956, and mutual benefit financial companies (as defined in the 1998 public deposit directions) are exempt.
Where can I find the full updated notification?
The notification is available on the RBI website at http://www.rbi.org.in. The circular references the updated text as of June 30, 2012.