MUMBAI, June 11: The Reserve Bank of India (RBI) on Wednesday warned the non-banking finance companies (NBFCs) that if they failed to register themselves by July 8, they would be out of business from the next day.

Under the provisions of Section 45-IA of the new RBI Act, all NBFCs, including residuary NBFCs, which came to existence before January 9, are to apply for certificate of registration by July 8.

The finance ministry and the Reserve Bank have clarified that there would be no extension of the deadline. ``In case of non-compliance, NBFCs will not be permitted to accept deposits from July 9,'' the RBI said.

NBFCs which were already registered with the RBI under the earlier guidelines are also required to apply again to the central bank for registration. All NBFCs and RNBCs which were in existence before January 9, 1997 but have not submitted their application for registration so far, have been advised to apply in the prescribed form of application by July 8, 1997.

There are currently around 40,000 NBFCs in the country. The RBI has the power to either register the NBFCs or reject their applications. If rejected, the NBFC will have to stop doing business as a finance firm.According to the existing laws, the minimum net worth of an NBFC should be Rs 25 lakh and 20 % of its profits will have to be compulsorily deposited into a reserve fund to meet contingent liabilities. This has been brought down from the earlier level of Rs 50 lakh.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.