RBI Greenlights Northern Arc—Will This Reshape India’s Credit Landscape?

Northern Arc Capital has received official approval from the Reserve Bank of India (RBI) to undertake factoring business, marking a significant expansion in its financial services portfolio. The move positions Northern Arc as a key player in supply chain financing, enabling businesses to access efficient working capital solutions.

 

Key Highlights:

 

- RBI Certification: The approval allows Northern Arc to operate as an NBFC-Factor, facilitating invoice discounting and receivables financing for businesses.

- Strategic Expansion: The company aims to strengthen its presence in MSME financing, offering customized credit solutions to vendors, suppliers, and dealers.

- Industry Impact: Factoring services are expected to boost liquidity for small businesses, reducing dependence on traditional bank loans.

- Regulatory Compliance: Northern Arc meets RBI’s minimum net owned fund (NOF) requirement of ₹5 crore, ensuring financial stability in its factoring operations.

- Market Positioning: With over ₹1.97 trillion in finance enabled, Northern Arc continues to expand its footprint in India’s credit ecosystem.

 

This approval marks a major milestone for Northern Arc, reinforcing its commitment to financial inclusion and innovative credit solutions.

 

Sources: Reserve Bank of India, Northern Arc Capital, Economic Times.