NBFCs play an important role in the Indian financial system by complementing and competing with banks and by bringing in efficiency and diversity into financial intermediation. The Reserve Bank’s regulatory perimeter is applicable to companies conducting non-banking financial activity, such as lending, investment or deposit acceptance as their principal business. The regulatory and supervisory architecture is, however, focused more on systemically important non-deposit taking NBFCs (with asset size Rs 5 billion and above) and deposit accepting NBFCs with light touch regulation for other non-deposit taking NBFCs. Certain categories of entities carrying out NBFI activities are exempt from the Reserve Bank’s ....
