Scale Based Regulation for NBFCs

Shashank Raj Gupta
Scale Based Regulation for NBFCs

Question : RBI has recently(October 2021) announced scale-based regulatory framework for NBFCs. Accordingly, which of the following statement/s is/are correct ?
Statement —

  1. It will be effective from 1 October, 2022.
  2. Regulatory structure for NBFCs shall comprise of four layers
  3. There will be a ceiling of ₹1 crore per borrower for financing subscription to IPO
    Options —
    a. Only 1.
    b. Only 2.
    c. Only 3.
    d. All of the above
    Ans. d.
    Related facts —

RBI has recently(October 2021) announced scale-based regulatory framework for NBFCs.
Key points of the framework —

  1. It will be effective from 1 October, 2022.
  2. Regulatory structure for NBFCs shall comprise of four layers.
  3. The top ten eligible NBFCs in terms of their asset size will always reside in the upper layer, irrespective of any other factor.
  4. The RBI has tweaked the NPA classification to more than 90 days for all categories of NBFCs.
  5. There will be a ceiling of ₹1 crore per borrower for financing subscription to IPO.

Link:
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12179&Mode=0