The Reserve Bank of India has exempted Non-Banking Financial Companies from following requirements:
- Requirement for having a net owned fund of less than twenty-five lakh rupees
- Requirement to invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than five per cent, or such higher percentage not exceeding twenty-five per cent
- Requirement to create a reserve fund and transfer therein a sum not less than twenty per cent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.
Subject to the NBFC being:
(a) providing only microfinance loans as defined under the Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022, provided the monthly loan obligations of a household does not exceed 50 per cent of the monthly household income; and
(b) licensed under Section 25 of the Companies Act, 1956 or Section 8 of the Companies Act, 2013; and
(c) not accepting public deposits as defined under the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016; and
(d) having asset size of less than ₹100 crore.
(ii) being a mutual benefit company as defined in paragraph 3(x) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016.
