1. REGULATORY FRAMEWORK FOR
NBFCs in India
by
KRUSCH PATHIPPALLIL ANTONY
HEAD-LEGAL , SFL & ACCREDITED MEDIATOR

2. ABSTRACT
 Evolution of Regulatory frameworks for Non-Banking Finance
Companies in India till date are examined in the context of
emerging regulatory laws, and further analysed the same in the
context of various Committee Reports and Working Groups as
well as from the mandates of Reserve Bank of India
(RBI).Circulars of RBI and recommendations of FSLRC and
the Draft IFC are analysed. The study comes up with the
findings that the NBFCs are converging with the Banking
sector.

3. Objectives of the and Research Design
 The study attempts to know the evolution of regulatory frameworks for NBFCs,the changing laws,and
emerging rules, regulations and laws are examined, and an opportunity for regulatory convergence is suggested.
 The study attempts to know the evolution of regulatory frameworks for NBFCs,the changing laws,and
emerging rules, regulations and laws are examined, and an opportunity for regulatory convergence is suggested.

4. Evolution of Regulatory Frameworks through RBI Notifications
and Circulars
 :- (1) NBFC principal business defined , (2) Internal Audit Compulsory for
NBFCs , (2) Asset Liability Management for NBFCs , (3) Directives for
venture capital companies and stock broking companies, (4) Re-designing of
financial statements , (5) Monitoring capital markets , (6) Introduction of Fair
Practice Codes , (7) Separate Prudential Norms for NBFCs , NBFCs-D and
NBFCs- ND- SI.
 Working Committees on NBFCs , and emerging Financial Sector Legislative
Reforms Commission-2013 ; Financial Sector Legislative Reforms
Commission-2013 , and the emerging Indian Financial Code.

5. Conclusion
 The convergence of NBFCs to Banks, Small Finance Banks and Payment Banks along with
the recommendations of Dr. Nachiket Mor Committee for regulatory convergence between Banks
and NBFCs based on the principle of neutrality and in the lines of Usha Throat Committee
Recommendations, with RBI regulatory norms in tune with the same, the road map for
regulatory convergence is complete from shadow banking to banking in India.

6. Study Recommends
 (1)A single regulator for Banks, NBFCs-Dand NBFCs-ND-SI,and the same to be retained with RBI,(2)
NBFCsother than NBFCs-Dand NBFCs–ND-SIto be under the proposed unified Regulatory Authority – a
Financial Authority,(3)Extension of Recovery of Debts Due to Banks and Financial InstitutionsAct, 1993
along with the Securitisationand Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002, for NBFCs-Dand NBFCs–ND-SIas part and parcel of a complete convergence of NBFCswith Banks.