RBI Introduced Revised Scale-Based Regulatory Framework for NBFCs

October 25, 2021
Current Context: The Reserve Bank of India (RBI) has introduced a revised scale-based regulatory (SBR) framework for NBFCs in India.
RBI Introduced Revised Scale-Based Regulatory Framework for NBFCs
  • The revised SBR will be effective from 1st Oct 2022.
  • It covers various facets of regulation of NBFCs like capital requirements, governance standards, prudential regulation, etc.
  • It is having 4 layers as per the size, activity, complexity, and interconnectedness with the finance sector.
  • The NBFCs in the lowest layer will be known as NBFC - Base Layer (NBFC-BL).
  • The NBFCs in the middle layer will be known as NBFC - Middle Layer (NBFC-ML).
  • The NBFCs in the upper layer will be known as NBFC - Upper Layer (NBFC-UL).
  • The NBFCs who are in the top 10 with respect to asset size will be accommodated in the upper layer. In that case, no other factors will be considered.
  • The base layer includes non-deposit-taking NBFCs having below the asset size of Rs 1000 crore.
  • In the new framework, RBI has twisted the NPA classification to more than 90 days for all categories of NBFCs.
  • There will be a ceiling of Rs 1 crore per borrower for financing a subscription to Initial Public Offer (IPO).
  • Static Part: 
    • HQ of RBI: Mumbai

Question: 

Q.1 The RBI has introduced a revised scale-based regulatory (SBR) framework for NBFCs in India, which will be effective from ____?
a. 1st April 2022
b. 1st Dec 2021
c. 1st Oct 2022
d. 1st July 2022

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