What changed
RBI issued a master circular compiling all miscellaneous directions/instructions for NBFCs that were not part of other master circulars. The circular consolidates 32 distinct items, from ALM systems to cheque standardisation, into one document. It does not introduce new rules but brings existing ones together for easier reference.
What it means for you
NBFCs now have a single source for miscellaneous regulatory instructions, reducing the need to track multiple circulars. This simplifies compliance but also means any deviation from these consolidated instructions could attract scrutiny. Banks dealing with NBFCs should ensure their counterparties are aligned with these requirements.
What you must do
- Review the master circular and ensure your NBFC's policies cover all 32 items listed.
- Update internal compliance checklists to reference this consolidated circular instead of older individual ones.
- Train compliance teams on key areas like ALM, nomination rules, and prudential norms highlighted in the circular.
- For deposit-taking NBFCs, verify compliance with the minimum net owned fund (NOF) of Rs 200 lakh requirement.
Who it affects
All Non-Banking Financial Companies (NBFCs), NBFC-MFIs, NBFC-Factors, Core Investment Companies (CICs), Residuary Non-Banking Companies (RNBCs)
Does this master circular introduce any new regulatory requirements?
No, it consolidates existing miscellaneous instructions issued up to June 30, 2013, that were not covered in other master circulars. It does not create new obligations.
Which NBFCs are covered under the ALM guidelines mentioned in this circular?
The ALM guidelines apply to all NBFCs irrespective of whether they accept/hold public deposits, but initially only those with an asset base of Rs 100 crore or more (whether accepting deposits or not) or holding public deposits of Rs 20 crore or more (as per audited balance sheet as of March 31, 2001) are required to implement the ALM system.
What is the minimum net owned fund requirement for deposit-taking NBFCs as per this circular?
The circular states that deposit-taking NBFCs must maintain a minimum net owned fund (NOF) of Rs 200 lakh.