Madras HC Upholds RBI’s Net Owned Fund (NOF) Rules for NBFCs

Federation of Indian Asset Financiers Associations Vs. Reserve Bank of India (Madras High Court) Summary: The Madras High Court recently upheld the Reserve Bank of India’s (RBI) regulatory framework on Net Owned Fund (NOF) requirements for Non-Banking Financial Companies (NBFCs). The case, brought by the Federation of Indian Asset Financiers Associations, challenged the RBI’s circular increasing the NOF threshold from ₹2 crore to ₹10 crore in phases until March 31, 2027. The petitioner argued that certain financial instruments and reserves should be included in NOF calculations, impact...