Statutory Guide for NBFCs -TAXMANN PUBLICATION 2025

This book is an authentic & updated Compendium of the Reserve Bank of India’s (RBI) Directions & Guidelines governing various Non-Banking Financial Companies (NBFCs). It consolidates and presents the regulatory framework NBFCs must comply with, ensuring you have the most current and reliable reference for all your professional needs.

It provides exhaustive coverage of the laws and regulations applicable to:

• Non-Banking Financial Companies (NBFCs)
• Residuary Non-Banking Companies (RNBCs)
• Miscellaneous Non-Banking Companies (MNBCs)
• Mortgage Guarantee Companies

Within its scope, this book includes updated & amended text of the relevant NBFC laws along with:

• Directions/Master Directions
• Circulars
• Notifications
• RBI Guidelines
• Rules/Regulations
• Clarifications
• Orders

A dedicated section provides a succinct yet thorough ‘Overview of Law relating to NBFCs’, enabling readers to understand better the legal and regulatory environment in which NBFCs operate in India. This overview acts as a primer for more detailed explorations in subsequent divisions.

This book will be helpful for:

• Legal Practitioners & Law Firms – Offering detailed guidance on NBFC-related litigation, advisory, and compliance issues
• NBFCs & Financial Institutions – Serving as an operational manual for day-to-day regulatory compliance and strategic planning
• Stakeholders in the Financial Services Sector – Providing in-depth insights into RBI’s evolving directives, clarifications, and governance norms

Its detailed analysis of the regulatory landscape, including references to relevant case law, clarifications, and FAQs, makes it the go-to resource for professionals seeking clarity on NBFC law.

The Present Publication is the 29^th Edition | 2025, incorporating all amendments made up to 1^st December 2024, with the following noteworthy features:

• [All-in-One Reference] Brings together RBI Directions, Master Directions, Circulars, Notifications, Rules/Regulations, and more
• [Easy Navigation] Well-structured divisions, sequential arrangement of legal sources, and a thorough subject index

This book is divided into eleven divisions, carefully sequenced to guide you through every significant facet of NBFC legislation and practice:

• Law Relating to NBFCs
  • 10+ Directions – Including acceptance of public deposits, scale-based regulations, KYC guidelines, prudential norms, corporate governance, etc.
  • Guidelines – Covering RBI’s broad instructions and advisories for NBFCs
  • Exemptions – Detailing specific exemptions to various categories of NBFCs under the RBI Act
  • Schemes – Analysing special schemes for financing, recovery, restructuring, etc.
  • Miscellaneous Instructions – Encompassing Fair Practices Code, credit card issuance, audit requirements, and more
• Clarifications from the Reserve Bank of India (2016–2024)
  • A ready reference to official clarifications, circulars, FAQs, and interpretative guidance issued by RBI over the years, providing solutions to practical queries and complex regulatory scenarios
• Law Relating to Residuary Non-Banking Companies
  • Clear exposition of the Residuary Non-Banking Companies (Reserve Bank) Directions, 2016
  • Deposit norms, prudential regulations, statutory investments, and compliance reporting for RNBCs
• Law Relating to Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 2016
  • Explaining the frameworks unique to MNBCs, including permissible activities, deposit acceptance from shareholders, and RBI’s supervisory approach
• Law Relating to Mortgage Guarantee Companies
  • Detailed coverage of Mortgage Guarantee Companies (Reserve Bank) Directions, 2016
  • Guidelines on registration, operational protocols, prudential norms, and risk management in mortgage guarantee business
• Foreign Direct Investments in the NBFC Sector
  • Comprehensive insights into FDI policy, eligibility norms, and compliance obligations, including relevant provisions under FEMA and recent RBI amendments
• Foreign Exchange Management (Deposit) Regulations
  • Covers FEMA 5(R)/2016-RB and subsequent amendments, essential for NBFCs accepting foreign currency deposits or dealing with non-resident clients
• Lending to NBFCs & Other Matters
  • Bank Finance to NBFCs – Regulatory guidelines, eligibility conditions, prudential limits, and due diligence expectations
  • Amalgamation/Merger of NBFCs with Banks – Procedural requirements, RBI approvals, and other compliance obligations
  • Credit Card, Debit Card & Prepaid Card Operations – Instructions for both banks and NBFCs issuing or partnering in card operations
  • Regulatory Measures towards Consumer Credit & Bank Credit to NBFCs – Recent circulars detailing interest rate norms, consumer protection measures, and enhanced disclosure standards
• Prescribed Returns
  • Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016 – Detailed guidance on statutory reporting (NBS-1, NBS-2, NBS-3, ALM returns, etc.)
  • Submission of Returns by Government-Owned Non-Banking Financial Companies – Special rules for government-owned entities, covering simplified compliance processes
• Insolvency & Bankruptcy Code (IBC) Provisions for NBFCs
  • Examines how the IBC framework applies to NBFCs, including the insolvency resolution and liquidation process for financial service providers
  • Relevant government notifications and judicial interpretations