Legal Updates

Background Supreme Court, in the case of Nedumpilli Finance Company Limited V. State Of Kerala & Ors., has delivered an important judgment on May 10, 2022. The issue in question was whether the NBFCs could also be regulated by State enactments such as Kerala Money Lenders Act, 1958 and Gujarat Money Lenders Act, 2011. The...

As the microfinance sector has gained more and more importance, RBI has introduced comprehensive microfinance regulations which are effective from 1st April, 2022. This article takes an overview of the said Directions are identifies the most urgent action points. Applicability These regulations are comprehensive both because of the facets covered and also because the same...

We have covered the different types of the NBFCs in our earlier articles which deal with its meaning and types. To regulate these NBFCs, RBI gets a number of powers under the Reserve Bank of India Act, 1934. RBI lays down different norms regarding functioning and governing of NBFCs through these powers. This Article takes...

We have discussed the provisions about the different layers of NBFCs, changes in net owned funds, requirements of experience of the Board and certain other requirements in Part I. Now, this Article shall focus upon the forthcoming capital guidelines, prudential regulations, as well as governance norms. As discussed earlier, these changes are effective from October...

NBFCs have typically enjoyed a less intense regulatory structure as compared to Banks. However, with the increase in the size, interconnectedness, and complexity of the operations of NBFCs, this picture is changing. The Reserve Bank of India is proposing to increase the compliance norms significantly with reference to the NBFCs. The Scale Based Regulation (SBR):...

Growth of information technology has opened various paths for the business. Since then, the outsourcing activities have become a major driver in the growth of businesses. The terms of outsourcing are governed by the contract between the parties. Additionally, Reserve Bank of India (RBI) governs the outsourcing by NBFCs through its circular on 9th November...

Core Investment Companies (‘CICs’) is a less discussed topic in professional circles. It is perhaps owing to the fact that there are only 59 CICs registered as of 31st January, 2022. However, this is a preferred vehicle for funnelling investments in group companies in the case of large corporate groups. CICs are unique because the...

What is NBFC- micro finance institution? The need for finance is an attribute of every section of society. It is underserved as the Banks simply reject the loan proposals of the persons who lack any assets or an assured source of income. To remedy this, microfinancing has emerged as a category of financial services targeting...

As we have discussed in our previous article, the NBFCs are basically companies which are financing any activity other than their own. These companies require registration with RBI before carrying out such business. Here, we are dealing with the process of registration along with some practical approaches for obtaining such registration. Why to register as...

What is an NBFC? Finance is the most crucial segment for building a strong and sound economy. Banks (both public and private sector) have long been the primary suppliers of finance for the Indian economy. Additionally, numerous co-operative societies and co-operative banks have played crucial supporting roles in the supply of finance. There are other...