RBI waives prior approval for gold‑loan NBFC branches
Change
The Reserve Bank of India removed the requirement for prior approval to open new branches for NBFC‑ICCs that lend against gold collateral and operate over 1,000 branches.
Why it matters
Dispensation applies to investment and credit companies (NBFC‑ICC) engaged in lending against gold collateral that operate more than 1,000 branches. Those NBFC‑ICCs no longer require prior RBI approval to open new branches. Housing finance companies and these NBFCs still require prior approval to open representative offices abroad. Parent NBFCs must obtain periodic reports on overseas representative offices; non‑reporting or inactive representative offices can be advised to wind up.
Implications
- • Large gold‑loan NBFCs with over 1,000 branches can open new branches without seeking prior RBI approval.
- • Management time and resources previously used for obtaining branch approvals can be reallocated to credit delivery and risk management functions.
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