RBI not to issue licenses for NBFI for 1 year

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RBI not to issue licenses for NBFI for 1 year
The Reserve Bank of India in its Monetary Policy Statement on Tuesday said it has suspended issuing Certificate of Registration (COR) for conducting business of NBFI for one year as central bank is working on the process of overhauling regulatory framework.

"There is a felt need to review the regulatory framework and streamline the NBFC sector, before taking a view on allowing more entities, into the sector. The Reserve Bank of India has, therefore, in public interest, announced that it has been decided to keep in abeyance, for a period of one year, the issue of Certificate of Registration (COR) to the companies proposing to conduct business of NBFI," RBI said in a notification.

The Nachiket More Committee on comprehensive financial services for small businesses and low income households, which submitted its report to the Bank on December 31, 2013, has made several recommendations pertaining to NBFCs. However, COR applications already received by the Bank on or before March 31, 2014, will be disposed of in the normal course.

The temporary suspension, will also not be applicable to COR applications that may be submitted by prospective systemically important Core Investment Companies (CIC-NDSIs), Infrastructure Finance Companies (IFCs), Infrastructure Debt Fund companies (IDF-NBFCs) and NBFCs proposing to conduct Micro-finance business (NBFC-MFIs). Such applications may be considered in public interest.

Dion Global Solutions Ltd.

Story first published: Wednesday, April 2, 2014, 13:14 [IST]
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