Four-tier scale-based regulatory guidelines for NBFCs from Oct 2022: RBI

Regulator limits IPO financing at Rs 1 cr per borrower

A four-layered scale-based approach to regulate non-banking finance companies (NBFC) in the country will kick in from October 1, 2022 to ensure tight oversight of the sector. Further, the Reserve Bank of India (RBI) has set a limit of Rs 1 crore per borrower for financing subscriptions to initial public offer (IPO). The ceiling will come into effect from April 1, 2022. The NBFC sector can fix more conservative limits, the RBI said in its preface to the new rules.

The regulatory structure will comprise four layers based on their size, activity, and perceived risk. The lowest layer will be