Finance Bill 2019 amends to give more powers to RBI to regulate NBFCs

Amendments to give more powers to RBI to regulate NBFCs form part of Finance Bill, 2019, which has been introduced in the ongoing Budget Session 2019 of Parliament. The proposed amendments would empower RBI to supersede the Board of an NBFC or remove its director(s), amalgamate or reconstruct or split an NBFC in public interest or for financial stability, remove and debar auditors, direct the inspection and audit of any group company of an NBFC, raise the Net Owned Fund requirement for NBFCs, and impose higher penalties in case of legal contraventions. With regard to taking of necessary regulatory and supervisory steps to strengthen NBFCs and maintain stability of the financial system, RBI has stated that it has taken a number of measures to strengthen NBFCs and maintain stability of the financial system.

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