What changed
RBI consolidated all amendments to the 2007 Prudential Norms Directions into a single updated notification as of June 30, 2013. The earlier 1998 Prudential Norms Directions stand superseded. The updated text is now available on the RBI website for easy reference.
What it means for you
NBFCs accepting or holding public deposits must comply with the updated 2007 Directions, which cover income recognition, asset classification, provisioning, capital adequacy, and exposure norms. This consolidation reduces ambiguity and ensures all current instructions are in one place, aiding compliance and audit.
What you must do
- Review the updated 2007 Directions notification and ensure your NBFC's policies align with all provisions, especially asset classification and provisioning requirements.
- Update internal compliance manuals and training materials to reflect the consolidated directions as of June 30, 2013.
- Submit the required statutory auditor certificate and half-yearly returns as per the updated norms.
- Ensure the audit committee is constituted as per the directions and reviews compliance periodically.
Who it affects
All Non-Banking Financial Companies (NBFCs) accepting or holding public deposits, Residuary Non-Banking Companies (RNBCs), Statutory auditors of these NBFCs, RBI's Department of Non-Banking Supervision
Does this circular apply to all NBFCs?
No, it applies only to NBFCs that accept or hold public deposits and to residuary non-banking companies. Government companies as defined under Section 617 of the Companies Act, 1956 are exempt.
What is the effective date of these directions?
The directions came into force with immediate effect from February 22, 2007, and this circular updates them as on June 30, 2013.
What are the key areas covered in the updated directions?
The directions cover income recognition, asset classification, provisioning, capital adequacy, exposure norms, disclosure requirements, audit committee constitution, and submission of returns.