restrictions for NBFC, if its rating is downgraded

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If rating of a NBFC is downgraded to below minimum investment grade rating, it has to stop accepting public deposit, report the position within fifteen working days to the RBI and reduce within three years from the date of such downgrading of credit rating, the amount of excess public deposit to nil or to the appropriate extent permissible under paragraph 4(4) of Non-Banking Financial Companies Acceptance of Public Deposits ( Reserve Bank) Directions, 1998; however such NBFC can renew the matured public deposits subject to repayment stipulations specified above and compliance with other conditions for acceptance of deposits.

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Meaning of NBFC
Section 45I (f) of RBI act, 1934
“Non‐banking financial company” means –

• a “Financial Institution” which is a company;

• a Non‐Banking Institution which is a company and
which has as its Principal Business the receiving of deposits, deposits, under any scheme or arrangement arrangement or in any
other manner, or lending in any manner;

• such other Non‐Banking Institution or class of such institutions, as RBI specifies