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RBI invites applications for recognition of self-regulatory organisations for NBFCs

The Reserve Bank of India has announced the invitation for applications to recognize Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs) under its newly established Omnibus Framework. This move follows the framework issued on March 21, 2024, which outlined the objectives, responsibilities, eligibility criteria, governance standards, and application process for SROs.

Membership Criteria:

The SRO for NBFC sector is primarily envisaged for NBFCs in the categories of Investment and Credit Companies (NBFC-ICCs), Housing Finance Companies (HFCs) and Factors (NBFC-Factors). However, the SRO may also have other categories of NBFCs as its members.

The recognized SRO should have a good mix of NBFC-ICCs, HFCs and NBFC-Factors as its members. To ensure fair representation to smaller NBFCs, the SRO must have at least 10% of the total number of NBFCs in the Base Layer as per Scale Based Regulatory Framework and categorised as NBFC-ICC and NBFC-Factor, as its members. Failure to achieve the aforesaid membership, within two years of the grant of recognition as SRO, would render the SRO liable for revocation of the recognition granted.

The SRO must achieve a minimum net worth of Rs 2 crore within one year of recognition or before starting operations, whichever is earlier. This net worth must be maintained continuously. The RBI will recognize a maximum of two SROs for the NBFC sector, provided the applicants meet the required criteria.

Interested applicants seeking recognition as an SRO may submit their application by September 30, 2024.

PR Newswire

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