RBI to review regulatory framework for Type-I NBFCs: Governor Malhotra

RBI Governor Sanjay Malhotra said the central bank will review and possibly introduce a separate framework for Type-I NBFCs, which do not accept public funds or have customer interface

As part of its effort to customise regulations based on the risk profile of entities, the Reserve Bank of India (RBI) will review the regulatory framework for Type-I non-banking financial companies (NBFCs), and if a separate framework is deemed necessary for such entities, the central bank will introduce one, RBI Governor Sanjay Malhotra said on Friday.

 

‘…a review will be carried out. If at all there is a need for regulations then we will do it,’ Malhotra said. 

 

Type-I NBFCs are those which do not accept public funds, do not intend to accept public funds in the future, do not have customer interface, and do not intend to have customer interface in the future. They primarily operate in a more restricted financial environment, such as investment holding or financing group companies.

 

In its annual report, the RBI, outlining its agenda for FY26, has enlisted ‘differentiated regulatory framework for Type I – NBFCs, i.e., NBFCs without public funds and customer interface’.

 

According to M Rajeshwar Rao, Deputy Governor, RBI, the review of regulations is a regular and ongoing process. ‘The RBI will assess and decide what kind of regulations they can come up with,’ Rao said.