With the regulation governing Non-Banking Financial Companies, the RBI has always been ahead to play an important role in declaring compliances to the government-owned companies as well as non-government companies. In this article, we will let you know what initiatives the RBI has taken for the government NBFCs with respect to compliance as well as withdrawing exemptions for government NBFCs. It has been introduced to make government NBFCs equal to the non-government NBFCs. The RBI circular has mentioned that it will meet the timeliness norms on capital adequacy, classification of assets, reserve fund maintenance and requirements of provisions, a framework of corporate governance and fair practice code. To know more about RBI guidelines for NBFCs, you can follow our blog and get updates and register NBFC here.
There are certain exemptions for the withdrawal of government NBFCs that RBI has introduced. Those are given below:
If any NBFC having setup for catering to specific sectors can request RBI for exemptions. This is one of the benefits of withdrawing exemptions for government NBFCs.
The only motive of RBI from this move is to bring government Non-banking financial institutions equal to that of the Non- government non-banking financial institutions regarding compliance with NBFC rules. There are some business entities which has been affected such as Power Finance Corporation, Indian Railway Finance Corporation, IFCI, India Infrastructure Finance Company, Indian Renewable Energy Development Agency and Housing & Urban Development Corporation. It will lead to enhancing a fair and free competition between the two types of ownership structures, subject to investors and the market’s valuations.
For further more information regarding Compliance of NBFCs, NBFC Registration you can visit our website: Legal Raasta
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