Updates

​The Reserve Bank of India (RBI) issued the “Master Direction – Access Criteria for NDS-OM” on February 7, 2025, updating the guidelines for accessing the Negotiated Dealing System – Order Matching (NDS-OM) platform. The new directions, effective immediately, supersede the 2024 guidelines and introduce provisions for SEBI-registered non-bank brokers to facilitate retail investor participation in government securities trading.

​The Reserve Bank of India’s Master Direction on Credit Information Reporting (2025) establishes a standardized framework for the reporting and dissemination of credit information, ensuring data quality, consumer rights, and grievance redressal mechanisms. It mandates Credit Information Companies (CICs) and Credit Institutions (CIs) to adhere to uniform reporting formats, maintain data accuracy through Data Quality Indexes, provide consumers with access to their credit reports, and implement compensation mechanisms for delays in rectifying credit information.​

​The Reserve Bank of India’s Master Direction on Non-resident Investment in Debt Instruments (2025) consolidates guidelines for foreign investments in Indian debt markets, detailing permissible routes, instruments, and limits. It aims to streamline regulations, enhance transparency, and facilitate foreign portfolio investments while ensuring compliance with FEMA and RBI Act provisions.

The Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 (updated as on September 6, 2024) establishes the regulatory framework for NBFC-Account Aggregators (NBFC-AAs) in India. These guidelines mandate that only registered companies can operate as Account Aggregators, requiring them to obtain a Certificate of Registration from the RBI. Key provisions include annual assessments of the ‘fit and proper’ status of directors and key management personnel, RBI approval for significant ownership changes, and adherence to financial criteria for dividend declarations. Additionally, NBFC-AAs must ensure that outsourced services comply with RBI’s risk management standards and are subject to periodic returns and inspections by the RBI.

The Master Directions on Fraud Risk Management in NBFCs (including HFCs) issued by RBI lay down a unified framework for early detection, reporting, and mitigation of frauds. These guidelines aim to strengthen internal controls and promote a proactive fraud risk governance culture across all NBFCs.

The Master Direction – Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 provides a comprehensive regulatory framework for NBFCs that are either systemically important non-deposit taking or deposit-taking entities. It outlines guidelines on capital adequacy, asset classification, provisioning norms, corporate governance, and reporting requirements to ensure financial stability and protect stakeholders’ interests.

These directions are applicable to NBFCs registered under the Reserve Bank of India Act, 1934, and aim to align their operations with prudential norms and risk management practices.

The Master Direction – Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 provides a regulatory framework for NBFC-NDSIs. These directions establish guidelines for registration, governance, prudential norms, and reporting requirements to ensure the sound functioning and financial stability of such companies.

The Master Direction – Exemptions from the provisions of RBI Act, 1934 (updated as on April 01, 2022) outlines specific exemptions granted to certain non-banking financial entities from select provisions of the RBI Act. These exemptions aim to streamline regulatory requirements for entities like payment system operators, merchant bankers, housing finance institutions, and others, based on their operational nature and risk profiles.

For instance, non-banking institutions authorized to operate payment systems and issue prepaid payment instruments under the Payment and Settlement Systems Act, 2007, are exempted from provisions of Chapter III B of the RBI Act, 1934, limited to money received for issuing such instruments. Similarly, entities like merchant banking companies, housing finance institutions, and certain government companies are exempt from sections like 45-IA, 45-IB, and 45-IC, provided they meet specific criteria related to their operations and financial activities.

These exemptions are designed to ensure that regulatory oversight is proportionate and tailored to the specific functions and risk exposures of different financial entities, thereby promoting efficiency without compromising financial stability.

The Master Direction – Residuary Non-Banking Companies (Reserve Bank) Directions, 2016 (updated as on February 22, 2019) provides a regulatory framework for Residuary Non-Banking Companies (RNBCs) in India. These guidelines establish norms on deposit acceptance, capital adequacy, repayment terms, and reporting requirements to ensure financial stability and protect depositor interests.

The Master Direction – Fit and Proper Criteria for Sponsors – Asset Reconstruction Companies (Reserve Bank) Directions, 2018, issued by the Reserve Bank of India, establishes comprehensive eligibility norms for existing and prospective sponsors of Asset Reconstruction Companies (ARCs). These guidelines assess factors such as the sponsor’s integrity, reputation, compliance history, financial stability, and governance practices to ensure that only qualified entities can promote or hold significant stakes in ARCs.

The Master Direction – Information Technology Framework for the NBFC Sector, issued by the Reserve Bank of India on June 8, 2017, provides a comprehensive IT governance framework for Non-Banking Financial Companies (NBFCs). It outlines guidelines on IT governance, policy, information and cyber security, IT operations, IS audit, business continuity planning, and IT services outsourcing to ensure the safety, security, and efficiency of IT processes within the sector.

The framework is divided into two sections: Section-A applies to systemically important NBFCs (with asset size above ₹500 crore), while Section-B provides recommendations for smaller NBFCs. NBFCs are required to conduct a gap analysis between their current IT practices and the stipulations laid out in the Master Direction and submit a time-bound action plan to address any gaps.

The Master Direction – Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016 provides a comprehensive framework for Non-Banking Financial Companies (NBFCs) to detect, report, and mitigate fraudulent activities. It outlines procedures for classifying frauds, reporting timelines, staff accountability, and coordination with law enforcement agencies to strengthen the integrity of the NBFC sector.