Sponsored
    Follow Us:
Sponsored

The Reserve Bank of India has issued Master Directions on the ‘Filing of Supervisory Returns’ by all Supervised Entities on February 27, 2024. In this article, we will focus on the changes applicable to NBFCs. It has provided a summary of changes to the existing circulars / Directions introduced, a list of circulars/notifications repealed with the issuance of these Directions w.r.t supervised entities, a list of applicable returns to be filed, alternate timelines for submission of select Returns, details of online portals for submission of returns by Supervised Entities.

Let’s start by familiarizing ourselves with several terms that are used frequently in the Master direction.

Supervised Entities:

Entities which are being governed under this Master direction are referred to as Supervised Entities.

1. Commercial Banks* – Public Sector Banks (PSBs), Private Sector Banks (PVBs), Small Finance Banks (SFBs), Payment Banks (PBs), Local Area Banks (LABs) and Foreign Banks (FBs).

2. Primary (Urban) Co-operative Banks.

3. All India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI and NABFID).

4. Non-Banking Financial Companies engaged in the business of financial institutions as contained in clause (f) of Section 45 I of the RBI Act, 1934*

*Note: Regional Rural Banks, Housing Finance Companies (HFCs)], and all Asset Reconstruction Companies (ARCs) are excluded from the ambit of this circular.

Supervisory Returns refer to all periodic/ad-hoc data submitted to RBI in formats prescribed from time to time.

CRILC refers to a database, i.e., Central Repository of Information on Large Credits (CRILC) as specified in the framework ‘Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders.

CIMS refers to an online platform, i.e., Centralized Information Management System of the RBI for return submission, data dissemination and other related purposes.

The Circular has provided timelines for submission of returns w.r.t each of the supervised entities specifically under Annexure III.

We will focus on submission of returns by NBFCs under this Article.

This circular repeals Master Direction- Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016 dated September 29, 2016.

As per RBI’s notification DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 (Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023), the Regulatory structure for NBFCs shall comprise of four layers. Accordingly, the schedule of returns for NBFCs has been revised to reflect the applicability of these four layers and the revised framework. The revised applicability is as follows:

Sr. No. Return Name Periodicity Reference Date Timeline for submission
1. DNBS10 Statutory Auditor’s Certificate (SAC) Return

The certificate shall be based on audited books of accounts of the applicable entity, for the preceding financial year.

Yearly 31st March [Within 5 working days from the date of signing of the Auditor’s report in terms of section 134 of the Companies Act, 2013, but not later than December 31st of same year, in any case]. All NBFCs
2. Form A Certificate

The certificate to be submitted by NBFCs regarding appointment of Statutory Central Auditor (SCA)/ Statutory Auditor (SA) in prescribed format as mentioned in the RBI’s notification on ‘Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs)’

Yearly 31st March [Within one month from the date of appointment of Statutory Central Auditor (SCA) / Statutory Auditor (SA)]. All NBFCs

Sr. No. Return Name Periodicity Reference Date Applicability
1. DNBS01

The return contains components of assets and liabilities, profit and loss account, exposure to sensitive sectors, sectoral credit etc.

Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFC – Upper Layer (NBFC-UL), NBFC – Middle Layer (NBFC-ML) [except NBFC-Core Investment Companies (CICs)]
2. DNBS02

The return contains financial details, viz. components of assets and liabilities, profit, and loss account etc. as well as for complying with various prudential norms.

Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFCs in Base Layer [except Peer-to-Peer Lending platform Companies (NBFC – P2Ps)]
3. DNBS03

The return contains prudential norms, e.g., capital adequacy, provisioning etc.

Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFC-UL, NBFC -ML [except NBFC-CICs]
4. DNBS04A

Return on Short Term Dynamic Liquidity

Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFC-UL, NBFC-ML [except Standalone Primary Dealers (SPDs)], and

iii. NBFC-BL with asset size of ₹100 crore and above solely or at Group level, [excluding Type-I NBFCs, and Non-Operative Financial Holding Companies (NOFHCs), P2Ps, AAs, and Mortgage Guarantee Companies]

DNBS04B

Return on Structural Liquidity and Interest Rate Sensitivity.

Monthly 31st March/ 30th April/ 31st May/ 30th June/ 31st July/ 31st August/ 30th September/ 31st October/ 30th November/ 31st December/ 31st January/ 28th or 29th February as applicable NBFC-UL, NBFC-ML [except Standalone Primary Dealers (SPDs)], and NBFC-BL with asset size of ₹100 crore and above solely or at Group level, [excluding Type-I NBFCs, and Non-Operative Financial Holding Companies (NOFHCs), P2Ps, AAs, and Mortgage Guarantee Companies]
5. DNBS08 CRILC-Main (NBFCs)

The return contains certain credit information in respect of borrowers who are having aggregate exposure of ₹5 Crore and above with NBFCs

Monthly 31st March/ 30th April/ 31st May/ 30th June/ 31st July/ 31st August/ 30th September/ 31st October/ 30th November/ 31st December/ 31st January/ 28th or 29th February as applicable NBFC-UL, NBFC -ML (except NBFC-CICs), and NBFC-BL which are NBFC-ICC, NBFC-MFI, NBFC-Factors having asset size of ₹500 crore and above solely or at Group level
6. DNBS09-CRILC Weekly – RDB return.

NBFCs may report certain information on large borrowers (having aggregate exposure of ₹5 crores and above with them), in case they do not have large borrower with default move-in/ move-out positions, it shall submit a ‘NIL’ return.

Weekly Friday of the Week NBFC-UL, NBFC -ML (except NBFC-CICs), and NBFC-BL which are NBFC-ICC, NBFC-MFI, NBFC-Factors having asset size of ₹500 crore and above solely or at Group level
8. DNBS11-CIC’s Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFC-CICs
9. DNBS12-CICs – Important Prudential Parameters Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFC-CICs
10. DNBS13 – Overseas Investment Details Quarterly 31st March/ 30th June/ 30th September/ 31st December All NBFCs
11. DNBS14- P2Ps– Important Financial & Prudential Parameters Quarterly 31st March/ 30th June/ 30th September/ 31st December NBFCs- Peer-to-Peer Lending platform Companies (NBFCs-P2P)
12. FMR – I (Report on Actual or Suspected Frauds) On occurrence of such event As and when the fraud is detected.

(Within three weeks from the Reference Date.)

NBFC-UL, NBFC -ML, and NBFC-BL which are NBFC-ICC, NBFC-MFI, NBFC-Factors having asset size of ₹500 crore and above
13. FMR – III (Update of Form FMR-I)

This return captures progress report on frauds of large value and it is to be filed as and when any development occurs in FMR-I details.

On occurrence of such event As and when any development occurs in FMR-1 details.

(Immediate).

NBFC-UL,

NBFC -ML, and

NBFC-BL which are NBFC-ICC, NBFC-MFI, NBFC-Factors having asset size of ₹500 crore and above

14. FMR – IV (Report on Dacoities / Robberies / Theft / Burglaries)

This return captures consolidated information on dacoities/robberies /theft/ burglaries.

Quarterly 31st March/ 30th June/ 30th September/ 31st December (Within 15 days from the Reference Date). NBFC-UL, NBFC -ML, and NBFC-BL which are NBFC-ICC, NBFC-MFI, NBFC-Factors having asset size of ₹500 crore and above

RBI has introduced various online portals for filing of all the applicable online returns by the SEs. Each SE is provided with a Super User Credential with defined access rights who, in turn, can create other users (with different roles such as Maker and Checker) for their entity with required access rights. Entities can monitor the status of their returns’ submission on the portal. Form A Certificate is to be submitted by NBFC’s in physical form.

Conclusion: The RBI’s latest directions on the filing of supervisory returns mark a significant enhancement in the regulatory framework for NBFCs and other supervised entities. By consolidating reporting requirements and specifying clear timelines and online submission protocols, these directions are set to significantly improve the ease and efficiency of compliance. The introduction of a structured online platform for submissions further aids in ensuring accuracy and timeliness in regulatory reporting. As entities adapt to these changes, the overarching goal remains to foster a more transparent, accountable, and stable financial environment. This initiative reflects the RBI’s commitment to leveraging technology and streamlined processes to enhance regulatory oversight and support the dynamic landscape of India’s financial services sector.

*****

Disclaimer: This article provides general information existing at the time of preparation and we take no responsibility to update it with the subsequent changes in the law. The article is intended as a news update and Affluence Advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting as a result of any material contained in this article. It is recommended that professional advice be taken based on specific facts and circumstances. This article does not substitute the need to refer to the original pronouncement.

Sponsored

Author Bio

Affluence Advisory Pvt. Ltd. is established with the vision to provide one stop solutions to clients’ needs in ever changing environment. Affluence is managed by a specialized team of Chartered Accountants, Company Secretaries, Corporate Lawyers, and Other Professionals committed to provide a q View Full Profile

My Published Posts

GST Implications for Accommodation Services Post 53rd GST Council Meeting Board report & financial statement Signing: Companies Act & SEBI (LODR) Notifications & Circulars – In light of 53rd GST Council Meeting Recommendations Benefits of filing the Return of Income Bombay HC Invalidates Reassessment Notice for AY 2015-16: Lack of DIN & Jurisdictional Issue View More Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Search Post by Date
July 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031