RBI Invites Applications for NBFC Sector's Self-Regulatory Bodies

The Reserve Bank of India (RBI) has issued a call for applications to recognize Self-Regulatory Organisations (SROs) for the Non-Banking Financial Company (NBFC) sector. This initiative falls under the RBI's comprehensive framework aimed at enhancing regulatory effectiveness.

Successful applicants must achieve a minimum net worth of Rs 2 crore within a year of recognition or before commencing operations. Notably, only up to two SROs for the NBFC sector will be recognized.

The RBI's March framework outlined key criteria, including objectives, responsibilities, governance standards, and the application process for SROs. These organizations will set minimum benchmarks for members and contribute to refining regulatory policies by offering practical insights.

The envisaged SROs will primarily include NBFC-Investment and Credit Companies (NBFC-ICCs), Housing Finance Companies (HFCs), and NBFC-Factors. Additionally, SROs must include varied NBFC types to ensure broad representation. The final date for application submission is September 30, 2024.