RBI Proposes 4-Tier Structure for Tighter Regulation of NBFCS

The RBI has proposed a tighter regulatory framework for non-banking financial companies (NBFCs) by creating a four-tier structure with a progressive increase in intensity of regulation.

  • In addition, RBI has also proposed classification of non-performing assets (NPAs) of base layer NBFCs from 180 days to 90 days overdue.
  • Its aims is to protect the financial stability while ensuring that smaller NBFCs continue to enjoy light-touch regulations and grow with ease.

Need

  • In view of the recent stress in the sector, it has become imperative to re-examine the suitability of this regulatory approach, especially when failure of an extremely large NBFC can precipitate ....
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