Further streamlining its norms of non-banking finance companies, Reserve Bank of India (RBI) has barred those companies having net worth less than Rs 200 lakh from accepting fresh deposits.
Further, the central bank has said that asset finance companies having a minimum investment grade credit rating and a capital adequacy ratio of 12% should bring down public deposits to 1.5 times of their net-owned funds, while all other companies may bring down their public deposits to a level equal to their NOF by March 31, 2009.
Previously, asset finance companies having a capital adequacy ratio of 12%, minimum investment grade credit rating, and with Rs 200 lakh net worth were allowed to accept public deposits four times more than their net-owned funds.
The banking regulator has also said that on attaining the NOF of Rs 200 lakh, NBFCs may submit a statutory auditor’s certificate certifying its NOF.
Those NBFCs failing to achieve the prescribed ceiling within the stipulated time period, may apply to the Reserve Bank for appropriate dispensation in this regard, which may be considered on a case to case basis, the central bank said.
“The need for strengthening of the financial system in general and deposit-taking entities in particular cannot be over emphasised. It is desirable that not only should NBFCs accepting deposits be adequately capitalised, but they should also have a uniform minimum NOF.
Therefore, it was considered necessary in public interest to review the minimum net-owned fund prescription applicable to such companies,” the RBI said.