Revised Regulatory Framework for NBFCs

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Jan 23, 2024

Revised Regulatory Framework for NBFCs

The RBI has issued the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 (‘SBR Master Directions’) on October 19, 2023, replacing the erstwhile Master Directions for NBFCs (systemically and non-systemically important), with immediate effect. The SBR Master Directions resolve the inconsistencies that arose in the interim period when both the erstwhile Master Direction framework and the SBR framework issued on October 22, 2021, were in force. With the introduction of these directions, both the erstwhile framework and the SBR framework have been consolidated into a comprehensive set of directions. While the SBR Master Directions categorises NBFCs based on the layers (i.e., base, middle, upper and top layer), the categorisation based on acceptance of deposits and the nature of activities also continues to apply to NBFCs.

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