New Delhi: The RBI has issued stringent rules for non-banking finance companies. Once these rules come into force, it will be clear how the situation of the NFBC company is. After these prompt corrective actions i.e. PCA rules come into force, the NBFC company will be tested on 3 different parameters. 

According to the same rule, now after failing on the first parameter, the Reserve Bank can ban the dividend distribution of NBFCs. Not only this but the promoters can also be told by the RBI to infuse the rupee. Failing on the second parameter, the RBI can ban the company from opening a new branch and at the same time ban on business expansion. After failing on the third parameter, the Reserve Bank of India can ban the business until the health of the NBFC company recovers.

After the new rules come into force, the Reserve Bank of India will exclude the NBFC company from the category of PCA only if it feels that the company is right to do business. These new and stringent rules will come into effect from October this year. Experts say that the RBI's move will improve the situation in the NGFC sector. Experts also say that these rules will prove beneficial for the sector. In fact, in the last 3 years, a lot of irregularities have come to the fore in 4 big NBFC companies. After the implementation of this rule, the sector is expected to improve. The RBI has also issued these rules with the same expectation. 

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