Requirement of minimum NOF of Rs. 200 lakh for all deposit taking NBF C s – RBI instructions
The companies engaged in the business of non-banking financial institution ( NBFI ) are required to obtain a Certificate of Registration (CoR from Reserve Bank of India to commence/carry on business of NBFI in terms of Section 45- IA of the RBI Act, 1934. The said section also prescribes the minimum Net Owned Fund requirement. In terms of Notification No.DNBS.132 / CGM ( VSNM ) – 99 dated April 21, 1999 , the minimum NOF requirement for the new companies applying for grant of CoR to commence business of an NBFI is stipulated at Rs.200 lakh .
To ensure a measured movement towards strengthening the financials of all deposit taking NBF C s by increasing their NOF to a minimum of Rs.200 lakh in a gradual, non-disruptive and non-discriminatory manner, RBI has prescribed that:
(a) As a first step, NBF C s having minimum NOF of less than Rs. 200 lakh may freeze their deposits at the level currently held by them.
(b) Further, Asset Finance Companies (AFC) having minimum investment grade credit rating and CRAR of 12% may bring down public deposits to a level that is 1.5 times their NOF while all other companies may bring down their public deposits to a level equal to their NOF by March 31, 2009 .
(c) Those companies which are presently eligible to accept public deposits upto a certain level, but have, for any reason, not accepted deposits upto that level will be permitted to accept public deposits upto the revised ceiling prescribed above.
(d) Companies on attaining the NOF of Rs.200 lakh may submit statutory auditor's certificate certifying its NOF.
(e) The NBFC s failing to achieve the prescribed ceiling within the stipulated time period, may apply to the Reserve Bank for appropriate dispensation in this regard which may be considered on case to case basis.
RBI's DNBS (PD) C . C . No. 114 /03. 02.059/2007-08, Dated: June 17, 2008