DNBR (PD) CC.No.097/03.10.001/2018-19
Harmonisation of different
categories of NBFCs
Please refer to paragraph 5 of
the Statement on Developmental and Regulatory
Policies of the Sixth Bi-monthly
Monetary Policy Statement for 2018-19 dated February 07, 2019 on
Harmonisation of NBFC Categories.
2. Over a period of time, evolution of the NBFC sector has
resulted in several categories of NBFCs intended to focus on specific
sector/ asset classes. Different sets of regulatory prescriptions were
accordingly put in place.
3. On a review, it has been decided that in order to
provide NBFCs with greater operational flexibility, harmonisation of
different categories of NBFCs into fewer ones shall be carried out based on
the principle of regulation by activity rather than regulation by entity.
Accordingly, it has been decided to merge the three categories of NBFCs
viz. Asset Finance Companies (AFC), Loan Companies (LCs) and Investment
Companies (ICs) into a new category called NBFC
- Investment and Credit Company (NBFC-ICC).
4. Differential regulations relating to bank’s
exposure to the three categories of NBFCs viz., AFCs, LCs and ICs stand
harmonised vide Bank’s circular
DBR.BP.BC.No.25/21.06.001/2018-19 dated, February 22, 2019. Further,
a deposit taking NBFC-ICC shall invest in unquoted shares of another
company which is not a subsidiary company or a company in the same group of
the NBFC, an amount not exceeding twenty per cent of its owned fund.
5. All related Master Directions (Non-Banking Financial
Company – Non-Systemically Important Non-Deposit taking Company (Reserve
Bank) Directions, 2016, Non-Banking Financial Company - Systemically
Important Non-Deposit taking Company and Deposit taking Company (Reserve
Bank) Directions, 2016, Non-Banking Financial Companies Acceptance of
Public Deposits (Reserve Bank) Directions, 2016, Standalone Primary Dealers
(Reserve Bank) Directions, 2016 and Residuary Non-Banking Companies
(Reserve Bank) Directions, 2016) have been updated accordingly.
Chief General Manager