RBI announces various policy measures relating to regulations

The Reserve Bank of India (RBI) has come up with a statement on Developmental and Regulatory Policies. Here are various developmental and regulatory policy measures relating to Regulations.

1. Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities (REs): RBI has decided to issue comprehensive instructions to REs on advertising, marketing and sales of financial products and services.

2. Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents: Currently, different sets of instructions are applicable to different categories of Regulated Entities (REs) with respect to the engagement of recovery agents and conduct related aspects of loan recovery. It has now been decided to review and harmonise all the extant conduct related instructions on engagement of recovery agents and other aspects related to recovery of loans.

 

3. Review of framework of Limiting Customer Liability in digital transactions: The extant instructions on limiting the liability of customers in unauthorised electronic banking transactions were issued in 2017, which deal with scenarios and timelines for zero / limited liability of a customer. In view of the rapid adoption of technology in the banking sector and payments systems, since issuance of these instructions, the existing instructions have been reviewed.

4. Bank Lending to Real Estate Investment Trusts (REITs): While bank lending to InvITs was allowed subsequently, lending to REITs was not permitted hitherto. Upon review and considering the presence of strong regulatory and governance framework for listed REITs, it is proposed to permit commercial banks to extend finance to REITs, subject to appropriate prudential safeguards. The existing guidelines in respect of lending to InvITs are also being harmonised for parity with prudential safeguards proposed for lending to REITs.

5. Review of Lending norms for UCBs: It is now proposed to rationalise the extant regulatory norms applicable for unsecured loans by UCBs; limits for lending to nominal members; and the tenor and moratorium requirements for housing loans. The proposed review shall adopt inter alia, a tiered and simplified approach while maintaining prudential discipline, taking into consideration the growth in total loans and advances of the UCBs over the past few years. Draft directions in this regard will be issued shortly for public consultation.

6. Exemption from registration to eligible NBFCs not availing public funds and not having customer interface (including 'Type I NBFCs'):. Considering their significantly lower systemic-risk profile, it is proposed that such Type-I NBFCs with asset size not exceeding Rs 1,000 crore, may be exempted from registration requirement with the Reserve Bank subject to certain specified conditions. The proposed exemption will reduce compliance requirements for these NBFCs. Accordingly, draft Amendment Directions will be issued shortly for feedback from stakeholders.

7. Amendment of NBFC Branch Authorisation Directions-2025: At per extant regulatory requirement, NBFC - Investment and Credit Companies (ICCs) engaged in the business of lending against gold collateral with over 1,000 branches are required to obtain prior RBI approval for opening new branches. In view of the comprehensive prudential and governance framework applicable to NBFC-ICCs, it is proposed to dispense with the requirement of prior approval for opening branches by such NBFCs.

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