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RBI moots scale-based tighter regulatory framework for NBFCs
Why is it in news?
- RBI has suggested a tougher regulatory framework for the non-banking finance.
Details:
- RBI's suggestion is aimed at preventing recurrence of any systemic risk to the country’s financial system.
- RBI released a discussion paper on the revised regulatory framework which is formulated on a scale-based approach.
- As per the proposals, the extant NPA classification norm of 180 days will be reduced to 90 days.
NBFCs:
- A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances.
- However, NBFC cannot accept demand deposits.