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In order to provide seamless customer interface as well as have a centralised data base, Reserve Bank of India (RBI) has asked certain class of Non-Banking Financial Companies (NBFCs) to mandatorily implement 'Core Financial Services Solution (CFSS)' by September 30, 2025. In a circular, RBI said it has been decided that NBFCs - Middle Layer and NBFCs - Upper Layer with 10 and more 'fixed point service delivery units' as on October 1, 2022 shall be mandatorily required to implement CFSS. CFSS is akin to the Core Banking Solution (CBS) adopted by banks.

It said CFSS shall provide for seamless customer interface in digital offerings and transactions relating to products and services with anywhere/ anytime facility, enable integration of NBFCs' functions, provide centralised database and accounting records, and be able to generate suitable MIS, both for internal purposes and regulatory reporting. As per the timeline prescribed in the circular, the two categories of NBFCs have to implement CFSS on or before September 30, 2025. However, NBFC - Upper Layer shall ensure that the CFSS is implemented at least in 70 per cent of 'Fixed point service delivery units' on or before September 30, 2024.

In the case of NBFC - Base Layer and NBFC - Middle and Upper Layers with fewer than 10 'Fixed point service delivery units', implementation of CFSS is not mandatory. However, they may consider implementation of a CFSS for their own benefit. Further, a quarterly progress report on implementation of CFSS, along with various milestones shall be furnished by the NBFCs concerned to RBI starting from the quarter ending March 31, 2023.