Minimum Subscription for NCDs by NBFCs Fixed at Rs 20,000

Mumbai: RBI today fixed minimum subscription per investor at Rs 20,000 for private placement of non-convertible debentures (NCDs) with maturity of more than one year by non-banking financial companies.

"NBFCs shall put in place a Board approved policy for resource planning which, inter-alia, should cover the planning horizon and the periodicity of private placement," it said in a notification.

It further said there should be a limit of 200 subscribers for every financial year, for issuance of NCDs with a maximum subscription of less than Rs 1 crore, and such subscription should be fully secured.

"There shall be no limit on the number of subscribers in respect of issuances with a minimum subscription of Rs 1 crore and above," the guidelines added.

It further said an NBFC (excluding core investment companies) should issue debentures only for deployment of funds on its own balance sheet and not to facilitate resource requests of group entities, parent company or associates.