Reserve Bank has granted certificate of registration to 138 applicants from February 20, 1999, to October 15, 1999, taking the total number of registered NBFCs (including residuary non-banking companies) that have been approved and allowed to hold /accept public deposits to 640. However, because of the RBI guideline increasing the minimum NoF requirement for the new applicants from Rs 25 lakh to Rs 2 crore, hardly 20 companies have applied for fresh registration, an RBI official told The Financial Express. "Of this, only five cases have been granted RBI registration and the rest are still pending the apex bank's approval.

However, even these five NBFCs will not be allowed to raise public deposits for the next two years," the RBI official said. Meanwhile, RBI has notified the changes in its regulations pertaining to the NBFCs following the recent credit policy announcements on the same. The changes come into force with immediate effect. As a first step, the borrowings from mutual funds registered with SEBI have been exempted from the purview of public deposits.

"In view of the fact that the mutual funds have the time tested appraisal techniques for assessment of the borrowers' capacity to repay the debts and they do not require the same degree of protection as needed by the depositors under the RBI Act, it has been decided to exempt the borrowings from mutual funds from the purview of public deposits. The NBFCs may reduce the amount of borrowings from mutual funds while computing the outstanding public deposits as on December 31, 1999 and maintain the liquid assets on and from April 1, 2000 on the remaining public deposit liabilities as per the existing provisions," RBI said. In the credit policy, the RBI governor had also advised NBFCs to give at least three months public notice before closure of the branch/office or the sale/transfer of ownership by an NBFC.