RBI places on its Website Draft Guidelines based on Usha Thorat Committee Report on Issues and Concerns in NBFC Sector

In order to adopt a consultative approach, the Reserve Bank of India has, today, placed on its website, draft guidelines to address issues and concerns in the NBFC sector. The draft guidelines are based on recommendations made by the Working Group on the Issues and Concerns chaired by Smt. Usha Thorat, former Deputy Governor, Reserve Bank of India. The Report of the Working Group was placed on RBI website in August 2011.

It may be recalled that the Working Group was constituted to review the existing regulatory and supervisory framework of non-banking finance companies (NBFCs). The objectives of the Working Group were to address issues relating to regulatory arbitrage and systemic risk, so as to create a strong and resilient non-banking financial sector.

The draft revised guidelines relate to entry point norms, principal business criteria, prudential regulations, liquidity requirements for NBFCs and corporate governance. While accepting some of the suggestions, the Bank has been mindful that their implementation should not disrupt the sector. Hence, ample transition time has been proposed to bring the new regulatory framework into existence.

Comments/suggestions on the draft guidelines may be forwarded to the Chief General Manager-in-Charge, Department of Non-Banking Supervision, Reserve Bank of India, Central Office, WTC, Cuffe Parade, Mumbai-400 005 or emailed latest by January 10, 2013.

Alpana Killawala
Chief General Manager