The RBI, on October 22, 2021, mandated Non-Banking Financial Companies (‘NBFCs’) with 10 or more branches to adopt the ‘core banking solution’ adopted by banks (‘CBS’). The RBI has now, by way of Circular dated February 23, 2022 (‘Circular’), mandated NBFCs – Middle Layer and NBFCs – Upper Layer (‘NBFC-UL’) with 10 or more ‘fixed point service delivery units’ (as defined in the Circular) as on October 1, 2022, to implement the ‘Core Financial Services Solution’ (‘CFSS’), akin to the CBS, by September 30, 2025. An NBFC-UL, in particular, must implement the CFSS in at least 70% of fixed-point service delivery units on or before September 30, 2024.

The CFSS must (a) provide for seamless customer interface in digital offerings and transactions relating to products and services with an ‘anywhere / anytime’ facility; (b) enable integration of NBFCs’ functions; (c) provide a centralised database and accounting records; and (d) also be able to generate suitable management information systems ‘MIS’, both for internal purposes and regulatory reporting.