The prudential guidelines for Non-Banking Financial Companies (NBFCs) issued by the Reserve Bank of India (RBI) form the backbone of financial discipline and risk management in the sector. These norms ensure NBFCs maintain sound practices in asset classification, provisioning, exposure management, liquidity, and governance, thereby safeguarding both creditors and the wider financial system. Under the…
Capital is the backbone of financial stability. Recognizing this, the Reserve Bank of India (RBI) has tightened and modernized the capital guidelines for Non-Banking Financial Companies (NBFCs) under its Scale-Based Regulatory (SBR) Framework. The norms focus on minimum Net Owned Fund (NOF), capital adequacy ratios, and progressive strengthening of buffers —all designed to make NBFCs…
The Reserve Bank of India (RBI) has steadily refined the nomenclature and regulatory norms for Non-Banking Financial Companies (NBFCs) through its Scale-Based Regulatory (SBR) Framework. This approach ensures that NBFCs are classified clearly, monitored effectively, and regulated proportionally to their size and risk. Let’s break it down. Nomenclature of NBFCs NBFCs are broadly categorized based…
The Reserve Bank of India (RBI) has rolled out a Revised Scale-Based Regulatory (SBR) Framework for NBFCs, marking a significant step in strengthening risk-based supervision and improving the resilience of non-banking financial companies (NBFCs) in India. This reform reshapes how NBFCs are governed, aligning oversight with their size, complexity, and systemic importance. Let’s break down…
The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by India to combat money laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005. Director, FIU-IND, and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant…
Prevention of Money Laundering Act, 2002(PMLA) is an Act enacted by the Government of India to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005. The Rules 3, 4 and 5 of PMLA 2005 amended by…
Non-Banking Financial Companies (NBFCs) are an essential part of India’s financial ecosystem, providing credit and financial services to individuals and businesses beyond the reach of traditional banks. Setting up an NBFC requires strict compliance with the Reserve Bank of India (RBI) regulations. Here’s a detailed breakdown of the requirements, documents, and registration process for obtaining…
Non-Banking Financial Companies (NBFCs) have emerged as one of the strongest drivers of inclusive growth in India. By reaching individuals, entrepreneurs, and communities that are often beyond the reach of traditional banks, NBFCs act as growth catalysts for a more equitable economy. Their flexibility, innovation, and strong presence in underserved regions make them critical players…
The Reserve Bank of India (RBI) is the primary regulator for Non-Banking Financial Companies (NBFCs) in India, overseeing their registration, operations, and compliance under the RBI Act, 1934 to ensure financial stability and depositor protection. Other entities like the National Housing Bank (NHB), Insurance Regulatory and Development Authority of India (IRDAI), Securities and Exchange Board…
Banking is a trust-driven business, and strict laws ensure this trust is never compromised. In India, penalties for banking offences are laid down in two cornerstone legislations—the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. These laws prescribe punishments ranging from imprisonment to hefty monetary fines, depending on the nature of…
