RBI To Introduce Scale-Based Regulation For NBFCs: Motilal Oswal
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Motilal Oswal Report
The Reserve Bank of India released a discussion paper on revised regulations for non-banking financial companies. The paper introduces a scale-based approach to regulation from a ‘systemic significance’ vantage point.
NBFCs would be categorised across four different layers (base, middle, upper, and top) based on various parameters including size, inter-connectedness with the system, etc.
The level of regulation/compliance requirement increases with each layer. More than 97% of NBFCs would be in the base layer, where no meaningful changes are suggested. These are NBFCs with a sub-Rs 10 billion asset size.
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