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Specified non-banking finance companies will have to implement core financial services solution by September 30, 2025. “…it has been decided that NBFCs– Middle Layer and NBFCs-Upper Layer with 10 and more ‘fixed point service delivery units’ as on October 1, 2022 shall be mandatorily required to implement ‘Core Financial Services Solution (CFSS)’, akin to the Core Banking Solution (CBS) adopted by banks,” the Reserve Bank of India said on Wednesday. A ‘fixed point service delivery unit’ is a place of operation from where the business activity of non-banking financial intermediation is carried out by the NBFC and which is manned either by its own staff or outsourced agents. NBFC – Middle and Upper Layers with 10 or more ‘fixed point service delivery units would be expected to implement this on or before September 30, 2025. “However, NBFC-UL shall ensure that the CFSS is implemented at least in 70 per cent of ‘fixed point service delivery units’ on or before September 30, 2024,” the RBI said.
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Agency attributes expected normalisation to gold prices stabilising since Oct 2021, normalcy returning in biz activitiesImplementation of CFSS would not be mandatory for NBFC – Base Layer and NBFC – Middle and Upper Layers with less than 10 ‘fixed point service delivery units’. “However, they may consider implementation of a CFSS for their own benefit,” the RBI said.
Seamless customer interface
The CFSS shall provide for seamless customer interface in digital offerings and transactions relating to products and services with anywhere and anytime facility, enable integration of NBFCs’ functions, provide centralised database and accounting records, and be able to generate suitable MIS, both for internal purposes and regulatory reporting. The RBI’s circular in October last year on Scale Based Regulation for NBFCs had said that NBFCs with 10 and more branches are mandated to adopt Core Banking Solution. NBFCs would be expected to submit a quarterly progress report on implementation of the Core Financial Services Solution, along with various milestones as approved by the board or committee of the board to the RBI from quarter ending March 31, 2023.
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