Lenders Law

  In the past year, the Reserve Bank of India (RBI) has imposed more than 100 monetary penalties on banks, NBFCs, fintechs, and cooperative institutions. These penalties span a wide range of compliance failures—from customer due diligence lapses to weak cyber security, and from outsourcing gaps to violations of lending norms. While the penalties differ in size, they all point to a common theme: regulatory compliance is non-negotiable . Here’s a breakdown of the most frequent reasons behind these actions. Category Typical Lapses Illustrative Orders Key Directions Change in management Failed to take prior written permission of the RBI before appointing a director Grewal Brothers Finance Company Private Limited (15 May, 2025) Mahindra Rural Housing Finance Limited (28 March, 2025) Habitat Micro Build Ind...

S. No. Policy Relevant Provision of Law Objective Remarks / Implementation Insights 1 Business Continuity Plan (BCP) & Disaster Recovery (DR) Policy Para 62, Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025 Ensure uninterrupted business operations during disasters or cyberattacks. Ensure vendors follow recovery protocols; conduct regular mock drills and resilience testing. 2 Fair Practices Code Para 7, Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 Promote transparency, ethical lending, and borrower protection. Use plain-language communications; disclose all charges upfront; avoid hidden clauses. ...

S. No. Compliance Relevant Provision Relevant Form / Portal Timeline Remarks 1 Display following information: (a) name and contact details (Telephone/ Mobile nos. and email address) of Grievance Redressal Officer. (b) If complaint/ dispute is not redressed within 1 (One) month, customer may appeal to Officer-in-Charge of Regional Office of DNBS of RBI (complete contact details), under whose jurisdiction registered office of NBFC falls. Para 12 of Reserve Bank of India (Non-Banking Financial Companies– Credit Facilities) Directions, 2025 - Ongoing Published at branches/places of business 2 Display following information: (a) name and contact details (Telephone/mobile number and E-mail ID) of Principal Nodal Officer. (b) details of complaint lodging portal of Ombudsman (https://cms.rbi.org.in) Para ...

CAT-II vs CAT-III AIFs S. No. Criteria Category II AIF Category III AIF 1 Investment Limit Accredited investors can invest up to 50% of investable funds in an investee company. Limit is 20% of investable funds in an investee company. 2 Tenure Close-ended, minimum 3 years. Open-ended or close-ended. 3 Investment Focus Primarily unlisted securities and/or listed debt rated ‘A’ or below. Listed/unlisted securities, derivatives, other AIFs, structured products, commodities, CDS. 4 Leverage Not permitted. Permitted up to 2x NAV through derivatives/borrowing. 5 Valuation Independent valuer once a year. NAV disclosure quarterly (close-ended) / monthly (open-ended). ...

Gift under FEMA — Light Theme Type of gift From NRI to NRI From Resident to NRI From NRI to Resident From Resident to Resident Foreign currency – LRS limits of USD 250,000 per FY would apply to the donor. (i) Under Rupee Drawing Agreement method, no limit on personal inward remittances (business capped at INR 15 lakhs for each remittance). (ii) Under Money Transfer Service Scheme, max $2,500 per transfer, max 30 transfers per FY. Only cross-border personal remittances, such as family maintenance and remittances favouring foreign tourists visiting India allowed. NRIs can gift cash, but residents cannot hold more than $2,000 (or equivalent) at any time. ...

India’s digital transformation has streamlined the entire banking and financial services through Aadhaar, e-KYC, and video-based verification[1]. However, these systems have posed severe barriers for persons with disabilities, particularly acid attack survivors with facial/ eye disfigurements and individuals with blindness. Recognising this, the Hon’ble Supreme Court in Pragya Prasun & Ors. vs. Union of India  issued a landmark judgment on 30th April 2025, mandating inclusive reforms in KYC processes. In this regard, the Securities Exchange Board of India had earlier issued a circular no. SEBI/HO/MIRSD/SECFATF/P/CIR/2025/74 dated 23rd May, 2025, directing all its intermediaries to comply with the said Supreme Court Order. Now, on 14th August, 2025, the Reserve Bank of India has issued a notification no. RBI/2025-26/74 , wherein it has directed that all regulated entities shall mandatorily undertake appropriate measures in this regard.  Background:  Two writ petitions...