RBI invites application for recognition of SRO for NBFCs
The SRO for the 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).
The Reserve Bank of India (RBI) has invited applications for recognition of Self-Regulatory Organisations (SROs) for the NBFC sector under its omnibus framework of recognizing SROs for regulated entities.
The SRO for the 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, as per the membership criteria.
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The recognized SRO shall have a good mix of NBFC-ICCs, HFCs, and NBFC-Factors as its members. To ensure fair representation to smaller NBFCs, the SRO shall have at least 10% of the total number of NBFCs in the Base Layer as per Scale Based Regulatory Framework and categorized as NBFC-ICC and NBFC-Factor, as its members, the bank added.
In addition, the applicant should achieve a minimum net worth of Rupees two crore within one year after recognition as an SRO by the Reserve Bank, or before the commencement of operations as an SRO, whichever is earlier. Thereafter, the SRO shall maintain this on an ongoing basis.
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