{"id":228,"date":"2024-04-04T10:47:17","date_gmt":"2024-04-04T10:47:17","guid":{"rendered":"https:\/\/www.thekgac.com\/blog\/?p=228"},"modified":"2024-04-04T10:47:17","modified_gmt":"2024-04-04T10:47:17","slug":"the-rbi-has-been-crucial-in-regulating-the-nbfc-sector","status":"publish","type":"post","link":"https:\/\/www.thekgac.com\/blog\/the-rbi-has-been-crucial-in-regulating-the-nbfc-sector\/","title":{"rendered":"The RBI has been crucial in regulating the NBFC sector"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

\ud835\udde7\ud835\uddf5\ud835\uddf2 \ud835\udde5\ud835\uddd5\ud835\udddc \ud835\uddf5\ud835\uddee\ud835\ude00 \ud835\uddef\ud835\uddf2\ud835\uddf2\ud835\uddfb \ud835\uddf0\ud835\uddff\ud835\ude02\ud835\uddf0\ud835\uddf6\ud835\uddee\ud835\uddf9 \ud835\uddf6\ud835\uddfb \ud835\uddff\ud835\uddf2\ud835\uddf4\ud835\ude02\ud835\uddf9\ud835\uddee\ud835\ude01\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\ude01\ud835\uddf5\ud835\uddf2 \ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6 \ud835\ude00\ud835\uddf2\ud835\uddf0\ud835\ude01\ud835\uddfc\ud835\uddff over the years. With the sector\u2019s evolution and changing dynamics, the regulator has been proactive in amending regulations.<\/p>\n\n\n\n

Previously, NBFCs were classified into two categories:
\ud835\udde6\ud835\ude06\ud835\ude00\ud835\ude01\ud835\uddf2\ud835\uddfa\ud835\uddf6\ud835\uddf0\ud835\uddee\ud835\uddf9\ud835\uddf9\ud835\ude06 \ud835\udddc\ud835\uddfa\ud835\uddfd\ud835\uddfc\ud835\uddff\ud835\ude01\ud835\uddee\ud835\uddfb\ud835\ude01 \ud835\uddee\ud835\uddfb\ud835\uddf1 \ud835\udde1\ud835\uddfc\ud835\uddfb-\ud835\udde6\ud835\ude06\ud835\ude00\ud835\ude01\ud835\uddf2\ud835\uddfa\ud835\uddf6\ud835\uddf0\ud835\uddee\ud835\uddf9\ud835\uddf9\ud835\ude06 \ud835\udddc\ud835\uddfa\ud835\uddfd\ud835\uddfc\ud835\uddff\ud835\ude01\ud835\uddee\ud835\uddfb\ud835\ude01. However, starting in October 2022, the RBI introduced a new classification system based on layers: Base, Middle, Upper, and Top.<\/p>\n\n\n\n

In the SBR Notification issued on October 22, 2021, the RBI provided clarification that the previous nomenclature “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\udde1\ud835\uddd7” (\ud835\udde1\ud835\uddfc\ud835\uddfb-\ud835\uddd7\ud835\uddf2\ud835\uddfd\ud835\uddfc\ud835\ude00\ud835\uddf6\ud835\ude01 \ud835\udde7\ud835\uddee\ud835\uddf8\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\udde1\ud835\uddfc\ud835\uddfb-\ud835\uddd5\ud835\uddee\ud835\uddfb\ud835\uddf8\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\uddd9\ud835\uddf6\ud835\uddfb\ud835\uddee\ud835\uddfb\ud835\uddf0\ud835\uddf6\ud835\uddee\ud835\uddf9 \ud835\uddd6\ud835\uddfc\ud835\uddfa\ud835\uddfd\ud835\uddee\ud835\uddfb\ud835\ude06) \ud835\ude04\ud835\uddfc\ud835\ude02\ud835\uddf9\ud835\uddf1 \ud835\uddef\ud835\uddf2 \ud835\uddff\ud835\uddf2\ud835\uddfd\ud835\uddf9\ud835\uddee\ud835\uddf0\ud835\uddf2\ud835\uddf1 \ud835\ude04\ud835\uddf6\ud835\ude01\ud835\uddf5 “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\uddd5\ud835\udddf.” \ud835\uddd4\ud835\uddf1\ud835\uddf1\ud835\uddf6\ud835\ude01\ud835\uddf6\ud835\uddfc\ud835\uddfb\ud835\uddee\ud835\uddf9\ud835\uddf9\ud835\ude06, \ud835\ude01\ud835\uddf5\ud835\uddf2 \ud835\ude01\ud835\uddf2\ud835\uddff\ud835\uddfa\ud835\ude00 “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\uddd7” (\ud835\uddd7\ud835\uddf2\ud835\uddfd\ud835\uddfc\ud835\ude00\ud835\uddf6\ud835\ude01-\ud835\udde7\ud835\uddee\ud835\uddf8\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6) \ud835\uddee\ud835\uddfb\ud835\uddf1 “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\udde1\ud835\uddd7-\ud835\udde6\ud835\udddc” (\ud835\udde6\ud835\ude06\ud835\ude00\ud835\ude01\ud835\uddf2\ud835\uddfa\ud835\uddf6\ud835\uddf0\ud835\uddee\ud835\uddf9\ud835\uddf9\ud835\ude06 \ud835\udddc\ud835\uddfa\ud835\uddfd\ud835\uddfc\ud835\uddff\ud835\ude01\ud835\uddee\ud835\uddfb\ud835\ude01 \ud835\udde1\ud835\uddfc\ud835\uddfb-\ud835\uddd7\ud835\uddf2\ud835\uddfd\ud835\uddfc\ud835\ude00\ud835\uddf6\ud835\ude01 \ud835\udde7\ud835\uddee\ud835\uddf8\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6) \ud835\ude04\ud835\uddfc\ud835\ude02\ud835\uddf9\ud835\uddf1 \ud835\uddef\ud835\uddf2 \ud835\ude00\ud835\ude02\ud835\uddef\ud835\ude00\ud835\ude01\ud835\uddf6\ud835\ude01\ud835\ude02\ud835\ude01\ud835\uddf2\ud835\uddf1 \ud835\ude04\ud835\uddf6\ud835\ude01\ud835\uddf5 “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\udde0\ud835\udddf” \ud835\uddfc\ud835\uddff “\ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6-\ud835\udde8\ud835\udddf.”<\/p>\n\n\n\n

Nevertheless, after an initial examination of the SBR Master Directions, it becomes evident that specific directives traditionally meant for NBFC-SI and logically relevant for NBFC-ML are explicitly maintained for NBFCs with assets exceeding \u20b9 500 crores. Here is a compilation of such directives:<\/p>\n\n\n\n

\u2705 All NBFCs need to be registered with the RBI.<\/p>\n\n\n\n

\u2705 NBFCs must follow KYC and AML guidelines to prevent money laundering and terrorist financing.<\/p>\n\n\n\n

\u2705 All NBFCs are expected to adhere to a Fair Practices Code, which outlines ethical business practices, transparency, and fairness in their dealings with customers.<\/p>\n\n\n\n

\u2705 Interest rates charged by NBFCs are subject to regulation by the RBI.<\/p>\n\n\n\n

\u2705 NBFCs need to follow the guidelines for asset classification and provisioning.<\/p>\n\n\n\n

\u2705 Regulations govern the functioning of Securitization Companies (SCs) and Reconstruction Companies (ARCs), which are specialized NBFCs involved in the acquisition and resolution of stressed assets.<\/p>\n\n\n\n

\u2705 NBFCs engaged in microfinance activities have specific regulations.<\/p>\n\n\n\n

\u2705 Housing Finance Companies (HFCs) have specific regulations governing their activities, including the requirement to invest in housing and real estate-related assets.<\/p>\n\n\n\n

\u2705 Promoters of new entities applying for an NBFC license are required to set up a NOFHC structure.<\/p>\n\n\n\n

\u2705 NBFCs, particularly Systemically Important NBFCs (SI-NBFCs), are subject to more stringent regulations regarding liquidity management and risk mitigation.<\/p>\n\n\n\n

\u2705 Corporate governance guidelines for NBFCs emphasize the role of the board, internal controls, and compliance mechanisms.<\/p>\n\n\n\n

\u2705 All NBFCs are subject to periodic regulatory reporting and supervision by the RBI. The frequency and depth of supervision may vary based on the category and size of the NBFC.<\/p>\n\n\n\n

It’s essential to note that regulations and guidelines are subject to change and updates by the RBI.<\/p>\n\n\n\n

#NBFC<\/a> #regulatory<\/a> #RBI<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\ud835\udde7\ud835\uddf5\ud835\uddf2 \ud835\udde5\ud835\uddd5\ud835\udddc \ud835\uddf5\ud835\uddee\ud835\ude00 \ud835\uddef\ud835\uddf2\ud835\uddf2\ud835\uddfb \ud835\uddf0\ud835\uddff\ud835\ude02\ud835\uddf0\ud835\uddf6\ud835\uddee\ud835\uddf9 \ud835\uddf6\ud835\uddfb \ud835\uddff\ud835\uddf2\ud835\uddf4\ud835\ude02\ud835\uddf9\ud835\uddee\ud835\ude01\ud835\uddf6\ud835\uddfb\ud835\uddf4 \ud835\ude01\ud835\uddf5\ud835\uddf2 \ud835\udde1\ud835\uddd5\ud835\uddd9\ud835\uddd6 \ud835\ude00\ud835\uddf2\ud835\uddf0\ud835\ude01\ud835\uddfc\ud835\uddff over the years. With the sector\u2019s evolution and changing dynamics, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-228","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/posts\/228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/comments?post=228"}],"version-history":[{"count":1,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/posts\/228\/revisions"}],"predecessor-version":[{"id":230,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/posts\/228\/revisions\/230"}],"wp:attachment":[{"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/media?parent=228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/categories?post=228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thekgac.com\/blog\/wp-json\/wp\/v2\/tags?post=228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}