RBI tightens screws on non-operative NBFCs

MUMBAI: The Reserve Bank on Thursday said NBFCs will have to commence business within six months of obtaining certificate of registration (CoR) else their licences will be cancelled.

"An NBFC which is in receipt of CoR must necessarily commence NBFC business within six months of obtaining CoR. If the business of NBFC is not commenced within six months...the CoR will stand withdrawn automatically," said an RBI circular.

RBI further said it has noted that some NBFCs obtain registration from the bank, park their funds in fixed deposits with commercial banks, but do not commence NBFI activities for several years thereafter.