Master Circular – Non-Systemically Important Non-Banking Financial Companies Prudential Norms
The Reserve Bank of India (RBI) has issued directions for non-systemically important non-banking financial (non-deposit accepting or holding) companies, effective from March 27, 2015.
The directions apply to all non-banking financial companies (NBFCs) that are not systemically important and do not accept or hold deposits.
The RBI has defined various terms, including infrastructure sub-sectors, and provided guidelines for licensing of new banks in the private sector.
The directions cover prudential norms, including income recognition, income from investments, and remaining maturity of instruments, with a rate of discount applicable.
The RBI has also outlined the framework for the regulation of NBFCs, including their licensing, capital requirements, and asset classification.
The directions aim to ensure the financial stability and soundness of NBFCs, and to protect the interests of their customers and stakeholders.
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