Mumbai, The Reserve Bank on Wednesday invited applications for recognition of self-regulatory organizations (SROs) for the NBFC sector under the central bank's omnibus framework.
The applicant must have acquired a minimum net worth of Rs 2 crore within a period of one year after being recognized as an SRO or before commencement of operations.
A maximum of two SROs will be recognized for the NBFC sector.
In March, the RBI had issued the framework for recognizing SROs for its regulated entities. SROs would be required to set minimum standards for their members.The framework specifies broad parameters such as objectives, responsibilities, eligibility criteria, governance standards and application process for SROs.
According to RBI, SROs enhance the effectiveness of regulations by utilizing the technical expertise of practitioners and also help in formulating/fine-tuning regulatory policies by providing inputs on technical and practical aspects.
"SROs for the NBFC sector have been envisaged primarily for NBFCs in the categories of Investment and Credit Companies (NBFC-ICC), Housing Finance Companies (HFCs) and Factors (NBFC-Factors). However, SROs for NBFCs There may be other categories as its members,” RBI said while inviting applications.It further states that recognized SROs should have a good mix of NBFC-ICCs, HFCs and NBFC-factors as members.
To ensure appropriate representation to small NBFCs, SROs should have at least 10 per cent of the total number of NBFCs in the base layer as per the scale-based regulatory framework and should be classified as NBFC-ICC and NBFC-Factor .
RBI said that failure to achieve the above membership within two years of being recognized as an SRO will render the SRO liable to be cancelled.
Applications can be filed till September 30, 2024.
The applicant must have acquired a minimum net worth of Rs 2 crore within a period of one year after being recognized as an SRO or before commencement of operations.
A maximum of two SROs will be recognized for the NBFC sector.
In March, the RBI had issued the framework for recognizing SROs for its regulated entities. SROs would be required to set minimum standards for their members.The framework specifies broad parameters such as objectives, responsibilities, eligibility criteria, governance standards and application process for SROs.
According to RBI, SROs enhance the effectiveness of regulations by utilizing the technical expertise of practitioners and also help in formulating/fine-tuning regulatory policies by providing inputs on technical and practical aspects.
"SROs for the NBFC sector have been envisaged primarily for NBFCs in the categories of Investment and Credit Companies (NBFC-ICC), Housing Finance Companies (HFCs) and Factors (NBFC-Factors). However, SROs for NBFCs There may be other categories as its members,” RBI said while inviting applications.It further states that recognized SROs should have a good mix of NBFC-ICCs, HFCs and NBFC-factors as members.
To ensure appropriate representation to small NBFCs, SROs should have at least 10 per cent of the total number of NBFCs in the base layer as per the scale-based regulatory framework and should be classified as NBFC-ICC and NBFC-Factor .
RBI said that failure to achieve the above membership within two years of being recognized as an SRO will render the SRO liable to be cancelled.
Applications can be filed till September 30, 2024.