2. Applicability

(1) (i) The provisions of these Directions shall apply to every Non-Banking Financial Company registered with the Bank under section 45IA (5) of the RBI Act.

The provisions contained in these directions shall not apply to

(ii) a Mutual Benefit Financial Company or a Mutual Benefit Company;

Provided that the application of Mutual Benefit Company is not rejected by Government of India under the provisions of the Companies Act, 1956 (Act 1 of 1956).

(iii) Nothing contained in these directions shall be applicable to:-

an insurance company holding a valid certificate of registration issued under section 3 of the Insurance Act, 1938 (Act 4 of 1938), or a stock exchange notified under section 4 of the Securities Contracts (Regulation) Act, 1956 (Act 42 of 1956), or a stock broking company defined in section 12 of the Securities and Exchange Board of India Act, 1992 (Act 15 of 1992);

(iv) (a) an investment and credit company not accepting/holding any public deposit:

Provided that the company passes in the meeting of its board of directors within thirty days of the issue of these directions and thereafter within thirty days of the commencement of the next financial year and each subsequent financial year, a resolution to the effect that the company has neither accepted public deposit nor would accept any public deposit during the year.

(b)(i) which has acquired shares/securities of its own group/holding/ subsidiary companies only and such acquisition is not less than ninety per cent of its total assets at any point of time;

(ii) which does not trade in such shares/securities; and

(iii) which does not accept/hold any public deposit:

Provided that the company passes in the meeting of its board of directors within thirty days of the issue of these directions and thereafter within thirty days of the commencement of each subsequent financial year a resolution to the effect that the company has invested or would invest/hold its investments in the shares/securities of its group/holding/subsidiary companies of not less than 90 per cent of its assets and (name of each company to be specified), that it would not trade in such shares/securities and that it has neither accepted nor would accept any public deposit during the year.

(v) These Directions shall apply to an NBFC being a Government Company as defined in section 2(45) of the Companies Act, 2013. The directions relating to prudential regulation, acceptance of public deposits, corporate governance, conduct of business regulations and statutory provisions etc. shall, however, be followed by the government NBFCs as per the timeline provided in Annex I. Government NBFCs that are already complying with the prudential regulation as per the road map submitted by them shall continue to follow the same.¹

(2) Further, the Bank may, if it considers necessary for avoiding any hardship or for any other just and sufficient reason, grant extension of time to comply with or exempt any company or class of companies from all or any of the provisions of these directions either generally or for any specified period subject to such conditions as the Bank may impose.

(3) These Directions consolidates the regulations as issued by Department of Non-Banking Regulation, Reserve Bank of India. However, any other Directions/guidelines issued by any other Department of the Bank, as applicable to a Deposit taking NBFC shall be adhered to by it.