Master Direction for Non-Banking Financial Companies
The Reserve Bank of India (RBI) has issued a Master Direction for Non-Banking Financial Companies (NBFCs), which includes systemically important non-deposit taking companies and deposit taking companies.
The direction provides guidelines for NBFCs on various aspects, including:
- Prudential Norms: Capital adequacy, asset classification, provisioning, and exposure norms.
- Corporate Governance: Board composition, CEO/MD appointment, and remuneration.
- Risk Management: Risk management framework, credit risk, market risk, and operational risk.
- Disclosure and Transparency: Disclosure of financial information, risk management practices, and corporate governance.
- Supervision: On-site inspection, off-site surveillance, and reporting requirements.
The direction also outlines the roles and responsibilities of NBFCs, their boards, and senior management.
The Master Direction is applicable to all NBFCs, including those that are systemically important, and is subject to periodic updates and revisions.
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