The Reserve Bank of India (RBI) clarified on Thursday that once a non-banking financial company (NBFC) reaches an asset size of Rs 100 crore or above, it shall come under the regulatory requirement meant for ?systemically important non-deposit taking non-banking financial company” (NBFC-ND-SI), despite not having such assets as on the date of the last balance sheet.
The central bank has advised that all such non-deposit taking NBFCs may comply with RBI regulation issued to NBFC-ND-SI from time to time, as and when they attain an asset size of Rs 100 crore, irrespective of the date on which such size is attained.
A non-deposit taking NBFC with an asset size of less than Rs 100 crore balance sheet as on date might subsequently add on assets before the next balance sheet date due to several reasons, including business expansion plans, said the RBI.
In case the asset size of a company falls below Rs 100 crore in a given month, due to temporary fluctuations and not actual downsizing, the company may continue to submit the monthly return on important financial parameters to the RBI and comply with the extant directions as applicable to NBFC-ND-SI till the submission of their next audited balance sheet to the RBI and till a specific dispensation is received from the bank.
In September 2005, the RBI said that all NBFCs with assets size of Rs 100 crore and above, and not accepting or holding public deposits were required to submit a monthly return on important financial parameters to the regional office under whose jurisdiction the company is located.