"Those asset finance companies (AFCs) that do not get a minimum investment grade rating by the end of March 2016, shall not renew existing deposits or accept fresh deposits thereafter," it said in the revised regulatory framework on NBFCs notified late on Friday evening.
Till March 2016, unrated companies or those with a sub-investment grade, have been allowed to only renew existing deposits on maturity, but barred from accepting fresh deposits.
It can be noted that the Reserve Bank had come out with a new regulatory framework for NBFCs last November, in which it insisted on having a much stronger capital base, failing which they would lose their registration.

In the revised norms released tonight, RBI said if a company's rating is downgraded, an NBFC should regularise the excess deposit with immediate effect, stop accepting fresh public deposits and renewing existing deposits.

In such an event, all existing deposits should runoff to maturity and NBFCs should report to the concerned RBI's Regional Offices within 15 days.

The RBI has also tweaked rules in respect of net-owned funds, and pegged the mandatory requirement at Rs 2 crore for all NBFCs and has given time till April 2017 to comply.

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