RBI issues norms for compensation key managerial staff at NBFCs

Finance companies need to set up nomination and remuneration committee, which will oversee the framing, review and implementation of compensation policy with board approval

The Reserve Bank of India (RBI) on Friday issued guidelines for compensation of key managerial personnel and senior management of non-banking finance companies, wherein it has said that the finance companies have to constitute a nomination and remuneration committee (NRC), which will have the mandate to oversee the framing, review and implementation of compensation policy of the company with the approval of the board.

Further, the NRC will also have to work with the risk management committee of the company to achieve effective alignment between compensation and risks.

“NRC may ensure that compensation levels are supported by the need to