RBI exempts small non-public NBFCs from registration
→Small non-public NBFCs must check exemption status or convert under RBI rules
Change
RBI issued Amendment Directions exempting NBFCs with assets up to ₹1,000 crore from registration when they do not access public funds and do not have customer interface.
Why it matters
The Directions create a narrower registration boundary for NBFCs that stay below the ₹1,000 crore asset threshold and have neither public-fund exposure nor customer interface. Existing NBFCs that fall inside this boundary must use the prescribed deregistration or conversion route instead of remaining under the old registration position.
Implications
- → NBFC compliance teams must test asset size, public-fund exposure and customer-interface status against the exemption criteria — a wrong classification leaves the entity under an incorrect RBI registration status.
- → Existing NBFCs that qualify for the exemption must follow RBI’s deregistration or conversion process — continuing under the previous framework misaligns the entity’s regulatory treatment.
- → Financial institution due-diligence teams must update NBFC status checks for counterparties — old RBI registration assumptions may no longer identify whether an entity is registered, exempted, converted or deregistered.
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Source
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