On 10 April 2026, the Reserve Bank of India released the “Draft – Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026”. The Draft Amendments provide a new methodology to classify Non-Banking Financial Companies (NBFCs) in the Upper Layer of the scale-based regulatory framework, thereby determining which NBFCs will be subject to more stringent regulations and supervision.
In this response, we present our comments to the Draft Amendments, set out across two sections.
- Section-1 provides specific input into the changes introduced in the draft, whereunder we contrast the existing regulations and the flexibility it affords to the RBI vis-à-vis the proposed changes, which limit the degrees of freedom for the RBI, while simultaneously increasing the capacity of the NBFCs to skirt the regulations.
- Section-2 suggests an alternate scoring mechanism, in line with global best practices.
Read the full response here.
