Lenders Law

While RBI returns often receive the greatest attention, regulatory inspections increasingly focus on whether an NBFC has adopted, implemented and periodically reviewed the policies mandated under various Master Directions and circulars. The following table serves as a practical reference for NBFCs. Sl. No. Particulars Approved / Reviewed By Frequency Key Compliance Points 1 Asset Liability Management (ALM) Policy Board / Risk Management Committee Annual review with periodic ALCO monitoring Monitor maturity mismatches, liquidity gaps and funding profile 2 Business Continuity Plan (BCP) Board Annual Conduct BCP testing and maintain disaster recovery arrangements 3 Business Model Framework Board Annual Review strategic assumptions, product mix and business risks ...

Demand and Call Loans have traditionally been viewed as flexible lending instruments, allowing lenders to recall the facility at any time. However, unrestricted discretion in recalling such loans or structuring repayment terms can expose borrowers to uncertainty and increase operational as well as governance risks. Recognising these concerns, the Reserve Bank of India has prescribed specific regulatory expectations governing the sanction, review and administration of Demand and Call Loans. While these requirements may appear straightforward, they are often overlooked during policy formulation and loan documentation. This article discusses the key compliance requirements applicable to NBFCs and the practical steps necessary to ensure regulatory compliance. What is a Demand and Call Loan? A Demand and Call Loan is a credit facility that is repayable on demand or after a notice period specified by the lender. Unlike term loans, these facilities generally do not have a fixed repayment ...

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...

Bitcoin lending has evolved from informal peer-to-peer arrangements into structured credit products , often routed through offshore special purpose vehicles (SPVs) and regulated intermediaries. At its core, bitcoin lending allows a borrower to access liquidity either in fiat or stablecoins , against a promise to repay with interest—sometimes with bitcoin involved as collateral, sometimes as the loan asset itself. For Indian lenders, fintechs, and compliance teams, the key question is no longer whether bitcoin lending exists, but how the risk is structured , where the enforceability sits , and whether it resembles credit or custody under Indian law. Two Distinct Models: A.  Bitcoin-Backed Loans (Collateralised Model): In a bitcoin-backed loan: The borrower pledges bitcoin as collateral; The lender disburses fiat currency or stablecoins; Bitcoin is typically custodied, escrowed, or controlled via smart contracts; Loan-to-Value (LTV) ratios, margin calls, and liquid...