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Informist, Tuesday, Feb. 10, 2026

 

--RBI releases draft NBFC registration, exemption norms 

--RBI seeks feedback on draft NBFC registration, exemption norms by Mar 4 

 

MUMBAI - The Reserve Bank of India Tuesday issued draft norms on exemption from registration for non-banking financial companies not availing public funds and not having a customer interface. The central bank has sought feedback on the draft norms by Mar. 4. Under the draft norms, non-banking financial companies with no public funds and no customer interface and an asset size of less than INR 10 billion will be exempted from the registration requirement. The exemption would also apply to non-banking financial companies holding a certificate of registration as 'Type I NBFC', the central bank said. 

 

"... these companies operate without accessing public funds and without having customer interface and their asset size is less than INR 10 billion, due to which the regulatory concerns on systemic risk and customer protection issues are not relevant in case of these NBFCs," the RBI said. "These companies normally undertake investments out of their owned funds and hence, their potential to pose systemic risk is very low."

 

The central bank has proposed that existing eligible non-banking financial companies that are not availing public funds and do not have a customer interface as their core business model, with an asset size of less than INR 10 billion, apply for deregistration by Sept. 30.

 

The RBI also clarified that any funds received from outside sources that constitute outside liabilities will be treated as public funds for 'Type I NBFCs'. As such, loans from directors and/or shareholders will be classified as public funds, it said. Further, the RBI said that 'customer interface' means interaction between the non-bank lender and its customers while carrying on its business.

 

"Customer interface can be through an account-based relationship, lending relationship or interaction with the customers as part of the business of the NBFC," it said.

 

"Any customer-oriented activity like lending or providing guarantees, including to 'entities in the group', its shareholders, its directors, or providing any other product or service to a customer would constitute 'customer interface'." The proposed directions will come into force from Apr. 1, it said. End

 

Reported by Pratiksha

Edited by Saji George Titus

 

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