RBI Invites Applications for Recognition of Self-Regulatory Organisations (SROs) for NBFCs

 आरबीआई ने एनबीएफसी के लिए स्व-नियामक संगठनों (एसआरओ) की मान्यता के लिए आवेदन आमंत्रित किए

The Reserve Bank of India (RBI) has announced the invitation of applications for the recognition of Self-Regulatory Organisations (SROs) in the Non-Banking Financial Company (NBFC) sector. This move follows the issuance of the ‘Omnibus Framework for Recognition of Self-Regulatory Organisations for Regulated Entities of the Reserve Bank’ on March 21, 2024. The framework outlined key parameters such as objectives, responsibilities, eligibility criteria, governance standards, and the application process for SROs. Additional sector-specific guidelines are now provided for the NBFC sector.

 Key Details of the Invitation

Membership Criteria for NBFC SROs:

The SRO for the NBFC sector will primarily cater to Investment and Credit Companies (NBFC-ICCs), Housing Finance Companies (HFCs), and Factors (NBFC-Factors). The SRO may also include other NBFC categories. To ensure fair representation, the SRO must include at least 10% of the total number of Base Layer NBFC-ICCs and NBFC-Factors as members within two years of recognition. Failure to meet this criterion may result in revocation of the SRO status.

Other Terms of Recognition:

- The applicant must achieve a minimum net worth of ₹2 crore within one year of recognition or before commencing operations, whichever comes first, and maintain this net worth on an ongoing basis.

- A maximum of two SROs for the NBFC sector will be recognized, contingent on applicants meeting the prescribed criteria.

- Applications must adhere to the guidelines set forth in the omnibus framework for recognition and operation of SROs.

- SROs may establish different verticals/divisions for different NBFC categories as needed.

 Application Process

Interested applicants must submit their applications by September 30, 2024, either via email or to the Chief General Manager-in-Charge, Department of Regulation, Reserve Bank of India, Central Office, 2nd Floor, Main Office Building, Shahid Bhagat Singh Marg, Mumbai – 400 001. Applications must be complete and comply with the instructions in the Omnibus SRO Framework. The RBI will consider all applications received during the application period and the decision of the Reserve Bank will be final.

This initiative aims to strengthen the regulatory framework for NBFCs by fostering self-regulation and ensuring robust governance standards within the sector.