Lenders Law

1. Introduction The RBI has, through its April 2026 draft directions , initiated a fundamental recalibration of the regulatory framework governing NBFCs. For NBFCs, this is not merely a consolidation of legacy circulars. It represents a transition toward a supervision-led regulatory architecture , with direct implications for governance, credit strategy, outsourcing models, and regulatory exposure. This blog examines key elements emerging from select draft directions and their implications for NBFCs, fintechs, and regulated entities. 2. Compliance Function: Institutionalizing Control at the Core of NBFC Operations The Reserve Bank of India (Non-Banking Financial Companies – Compliance Function) Directions, 2026 introduce: Annual Compliance Risk Assessment:  Senior management is required to conduct a formal, enterprise-wide compliance risk assessment and implement a mitigation plan. Chief Compliance Officer (CCO) Framework: Mandatory appointment of a CCO (including exter...

The proposed amendments to the Companies Act, 2013  mark a decisive shift in India’s corporate regulatory framework—balancing ease of doing business with stricter compliance enforcement. Drawing from the Notes on Clauses, the amendments reflect a move toward a flexible, prescription-driven regime, allowing the Government to calibrate compliance based on company size, nature, and activity. This post breaks down the key amendments and their practical impact. 1. Redefining “Small Company” – Expanded Eligibility: The threshold for classification as a small company has been significantly increased: Paid-up capital: up to ₹20 crore; Turnover: up to ₹200 crore. Why this matters:  Larger universe of companies benefit from: Reduced compliance burden; Simplified governance norms Particularly relevant for: Growth-stage startups and Mid-sized NBFC platforms. 2. Incorporation – Removal of Man...