RBI asks NBFCs to enable Core Fin Services Solution akin to that in banks

The Reserve Bank of India (RBI) said non-banking finance companies (NBFCs) in the upper and middle layer, with ten or more fixed point service delivery units as of October 1, 2022, will have to mandatorily implement “Core Financial Services Solution (CFSS)” by September 30, 2025, a system akin to the Core Banking Solution used by banks.

It will provide seamless customer interface in digital offerings and transactions relating to products and services with anywhere / anytime facility, the RBI said in a statement. Further, it will enable integration of NBFCs’ functions, provide centralised database and accounting records, and be able to generate a suitable management information system (MIS), both for internal purposes and regulatory reporting.

Earlier, the RBI had said, NBFCs with ten and more branches will be mandated to adopt Core Banking Solution. And a glide path of three years with effect from October 01, 2022 will be provided.

According to the scale-based framework for NBFCs, the middle layer consists of all deposit taking NBFCs, irrespective of asset size, non-deposit taking NBFCs with asset size of Rs 1,000 crore and above. Similarly, upper layer NBFCs consist of finance companies which are specifically identified by the RBI as warranting enhanced regulatory requirements.