RBI asks NBFCs with over Rs 5,000 cr assets to appoint chief risk officer

CRO will be entitled to voting rights in finance companies which use a committee structure to clear high-value loans with CRO as panel member

With crisis engulfing the non-banking financial company (NBFC) sector, the Reserve Bank of India (RBI) on Thursday asked finance companies with asset size more than Rs 5,000 crore to appoint a chief risk officer (CRO), who will function ‘independently to ensure the highest standards of risk management’.

The RBI in a statement said the CRO has to be a senior official in the hierarchy of an NBFC and will be appointed for a fixed tenure, with the approval of the board of the NBFC. The CRO shall be involved in the process of identification, measurement, and mitigation of risks. Moreover,