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 ...

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...

 -  From Policy Intent to Enforceable Conduct Standards On 11 February 2026, the Reserve Bank of India released the   Draft Non-Banking Financial Companies – Responsible Business Conduct (Amendment) Directions, 2026  (“ Amendment Directions ”), effective from 1 July, 2026 . These amendments form part of the RBI’s broader effort to recalibrate conduct regulation for regulated entities, particularly in areas impacting customer protection, fairness and governance. Notably, the Amendment Directions flow directly from the policy intent articulated in  RBI’s Statement on Developmental and Regulatory Policies , released alongside the February 2026 Monetary Policy. The Amendment Directions therefore represent a deliberate regulatory progression rather than an isolated compliance update. Why Responsible Business Conduct Matters? The regulatory emphasis on conduct is rooted in persistent customer-level issues observed across the NBFC sector. Common themes emerging f...