Introduction
SECP vide SRO # 437(i)/2019 dated April 8th 2019 made amendment by inserting provisos in Rule 5(5) and Rule 7(2)(ba) in the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003.
Commentary
Following new Provisos inserted in Rule 5(5) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003
New provisos require that persons engaged in business of Micro-Financing shall for grant of license apply in writing to the commission within six months from the date of publication of this notification or within extended date as may be specified through notification in official gazette.
Exception to the above: person shall not be required to obtain license, if engaged in business of micro financing, but having less than five thousand active borrowers or having outstanding loan portfolio of less than fifty million rupees.
Proviso to the exception: such person should be receiving funding or financing from a bona fide source such as local or international donor agencies of repute or Federal or Provincial Governments or their agencies or entities regulated by the Commission or State Bank of Pakistan or such other sources as specified by the Commission and such providers of fund shall endeavor to route the funding through proper banking channels and to oversee its operations so that these are conducted legitimately, as specified by the Commission.
Following new Provisos inserted in Rule 7(2)(ba) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003
Provided further that non-banking microfinance companies may set up non-financial subsidiaries with intimation to the Commission, whose business is conducted so as to supplement or complement the community service objective of the non-bank microfinance company:
Provided also that the conditions and modalities pertaining to these investments shall be specified by the Commission and any exceptions thereto shall be decided by the Commission on case to case basis.
Link of Document
final consolidated notification Amendment in NBFC Rules 2003 sent MOF clean
