The Reserve Bank of India recently directed to all the non-banking financial companies (NBFCs) – in the middle and upper layers with 10 or more ‘Fixed point service delivery units’ as of October 1, 2022 must implement Core Financial Services Solution (CFSS) by September 30, 2025, similar to the Core Banking Solution (CBS) used by banks.
Buy Prime Test Series for all Banking, SSC, Insurance & other exams
CFSS significance:
According to an RBI notification released on 23rd of February 2022, “The CFSS will enable seamless customer interface in digital offerings and transactions relating to products and services with anywhere/anytime facility, enable integration of NBFC functions, provide centralised database and accounting records, and be able to generate suitable MIS, both for internal purposes and regulatory reporting.”
The time frame for upper and middle layer NBFCs has been stipulated by September end 2025, the RBI directed the NBFC-UL to ensure that the CFSS is implemented in at least 70 % of ‘Fixed point service delivery units’ on or before September 30, 2024.
CFSS deployment is voluntary for base layer NBFCs and middle and upper layer NBFCs with fewer than 10 fixed point service delivery units.
The RBI added that by the beginning with the quarter ending March 31, 2023, “The NBFC shall furnish to the Senior Supervisory Manager (SSM) Office of the Reserve Bank on implementation of the Core Financial Services Solution with a quarterly progress report, along with various milestones as approved by the Board / Committee of the Board.”
The Middle Layer shall contains all deposit taking NBFCs (NBFC-Ds), regardless of asset size, non-deposit taking NBFCs with asset size of ₹1000 crore and above and NBFCs undertaking the subsequent activities — Standalone Primary Dealers (SPDs), Infrastructure Debt Fund – Non-Banking Financial Companies (IDF-NBFCs), Core Investment Companies (CICs), Housing Finance Companies (HFCs) and Infrastructure Finance Companies (NBFC-IFCs).
The Upper Layer shall comprise of these NBFCs which are specifically identified by the Federal Reserve Bank as warranting enhanced regulatory requirement. The highest ten eligible NBFCs in terms of their asset size shall always reside within the upper layer.
Key Takeaways:
The Uttarakhand Tourism Development Board has teamed up with Starscapes, an astro-tourism company, to introduce…
In a gesture of solidarity and recognition, Palestinian journalists covering the crisis in Gaza have…
Retired Justice Sanjaya Kumar Mishra has been appointed as the President of the Goods &…
Atanu Chakraborty's re-appointment as part-time Chairman of HDFC Bank for three years, effective from May…
American Express is set to inaugurate its expansive new campus in Gurugram, spanning nearly one…
In the latest edition of the World Press Freedom Index published annually by Reporters Without…