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Informist, Thursday, Feb. 26, 2026

 

--RBI releases NBFC miscellaneous amendment directions

--RBI: NBFCs miscellaneous amendment directions effective immediately

 

NEW DELHI – The Reserve Bank of India Thursday amended the non-banking financial companies' miscellaneous directions to help National Urban Co-operative Finance and Development Corp. Ltd. meet its mandate of strenthening the urban co-operative bank sector. Under the amendment, the central bank allowed the urban co-operative bank umbrella body to make offer or invitation to subscribe to its equity shares on a private placement basis to more than 200 persons in aggregate in a financial year.

 

The National Urban Co-operative Finance and Development Corp. was set up with a specific purpose--to function as an umbrella organisation for urban co-operative banks--with an overarching mandate to strength the urban co-operative bank sector by providing various kinds of fundbased support and non-fund-based services to its member urban co-operative banks. "To achieve its objectives, it is necessary that NUCFDC (National Urban Co-operative Finance and Development Corp.) grants membership to all the 1,400-plus UCBs (urban co-operative banks) as early as possible," the RBI said. 

 

However, the earlier provisions limited private placement offers by National Urban Co-operative Finance and Development Corp. to 200 persons in aggregate in a financial year. "This restriction would constrain the NUCFDC from granting membership to all UCBs expeditiously," the central bank said. 

 

Under the amended provisions, the National Urban Co-operative Finance and Development Corp. is required to have a board approved policy for resource planning which covers the planning horizon and the periodicity of the private placement. "Offer/invitation for the private placement of equity shares under these guidelines shall only be made to UCBs and National Co-operative Development Corporation," it said. 

 

Further, the offer document by National Urban Co-operative Finance and Development Corp. shall clearly state that urban co-operative banks must ensure compliance with all the applicable statutory requirements, as well as the extant directions issued by the RBI, when making an application for subscribing to the equity shares under the offer, it said.

 

The urban co-operative bank umbrella body is directed to not extend any loan or advance or any other kind of financial accommodation against the security of its own shares. Moreover, proceeds of the share capital raised should be used for the purposes consistent with the mandate of the umbrella body.

 

National Urban Co-operative Finance and Development Corp. is also required to ensure compliance with all the applicable statutory and regulatory requirements with regard to the private placement of securities and should submit a quarterly statement containing the amount of equity raised, the number and category of subscribers and the subscription amounts, during the quarter as well as cumulatively, to the RBI, within 15 days from the close of a quarter, it said. 

 

The amended directions are effective immediately till Mar. 31, 2029, unless modified or withdrawn earlier or extended further by the RBI.  End

 

Reported by Pratiksha

Edited by Akul Nishant Akhoury

 

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