RESERVE BANK OF INDIA DEPARTMENT OF NON …

1 RESERVE bank OF INDIA DEPARTMENT OF NON-BANKING REGULATION CENTRAL OFFICE, CENTRE I, WORLD TRADE CENTRE CUFFE PARADE, COLABA MUMBAI - 400 005. RBI/DNBR/2016-17/45 Master Direction DNBR. PD. 008 September 01, 2016 Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company ( RESERVE bank ) Directions, 2016 The RESERVE bank of INDIA (the bank ), having considered it necessary in the public interest, and being satisfied that, for the purpose of enabling the bank to regulate the financial system to the advantage of the country and to prevent the affairs of any Systemically Important Non-Deposit taking Non-Banking Financial Company (NBFC-ND-SI)

2 And Deposit taking Non-Banking Financial Company (NBFC-D) from being conducted in a manner detrimental to the interest of investors and depositors or in any manner prejudicial to the interest of such NBFCs, and in exercise of the powers conferred under sections 45JA, 45K, 45L and 45M of the RESERVE bank of INDIA Act, 1934 (Act 2 of 1934) and section 6 of the Factoring Regulation Act, 2011, hereby issues to every NBFC-ND-SI and NBFC-D, in supersession of the Notification DG(VL)-2007 dated February 22, 2007, Notification dated February 12, 2010, Notification No.

3 (US)-2011 dated November 21, 2011, Notification /CGM(US)2011 dated December 02, 2011, Notification (US)-2012 dated July 23, 2012 and Notification (CDS)-2015 dated March 27, 2015 the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company ( RESERVE bank ) Directions, 2016 (the Directions) hereinafter specified. 2 Index Section I : Introduction Chapter I Preliminary Chapter II Definition Chapter III Registration Section II.

4 Prudential Issues Chapter IV Capital Requirements Chapter V Prudential Regulations Chapter VI Fair Practice Code Chapter VII Specific Directions to NBFC- Factor Chapter VIII Specific Directions on IDF-NBFC Chapter IX Specific Direction on NBFC-MFI Section III : Governance Issues Chapter X Acquisition/Transfer of Control Chapter XI Corporate Governance Section IV : Miscellaneous Issues Chapter XII - Opening of Branch/Subsidiary/Joint Venture/ Representative Office or Undertaking Investment Abroad by NBFCs Chapter XIII Miscellaneous Instructions Chapter XIV Reporting Requirements Chapter XV Interpretations Chapter XVI Repeal Annex Annex I - Schedule to the Balance Sheet of a NBFC Annex II - Data on Pledged Securities Annex III - Guidelines for Licensing of New Banks in the Private Sector

5 Definitions Annex IV - Norms on Restructuring of Advances by NBFC Annex V - Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries Annex VI Calculation of CRAR after making provisions on AP portfolio 3 Annex VII - Self Regulatory Organization (SRO)

6 For NBFC-MFIs Criteria for Recognition Annex VIII-Information about the proposed promoters/directors/ shareholders of the company Annex IX - Fit and Proper Criteria for directors of NBFCs Annex X - Declaration and Undertaking by Director Annex XI - Form of Deed of Covenants with a Director of an NBFC Annex XII - Indicative List of Balance Sheet Disclosure for non-deposit taking NBFCs with Asset Size ` 500 Crore and Above and Deposit Taking NBFCs(hereinafter called as Applicable NBFCs) Annex XIII - Terms and Conditions Applicable to Perpetual Debt Instruments (PDI)

7 For Being Eligible for Inclusion in Tier I capital Annex XIV - Guidelines for Entry of NBFCs into Insurance Annex XV - Guidelines on issue of Co-Branded Credit Cards Annex XVI - Guidelines on Distribution of Mutual Fund Products by NBFCs Annex XVII- Guidelines for Credit Default Swaps - NBFCs as users Annex XVIII - Guidelines on Securitisation Transactions Annex XIX - Guidelines on Private Placement of NCDs Annex XX - Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy Annex XXI - Guidelines for Asset Liability Management (ALM) system in NBFCs 4 Section I Introduction Chapter I PRELIMINARY 1.

8 Short Title and Commencement. (1) These Directions shall be called the Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company ( RESERVE bank ) Directions, 2016. (2) These directions shall come into force with immediate effect. 2. Applicability (1) The provisions of these Directions shall apply to the following: (i) every Systemically Important Non-Deposit taking Non-Banking Financial Company (NBFC-ND-SI) registered with the bank under the provisions of RBI Act, 1934; (ii) every Deposit taking Non-Banking Financial Company (NBFC-D) registered with the bank under the provisions of RBI Act, 1934.

9 (iii) every NBFC-Factor registered with the bank under section 3 of the Factoring Regulation Act, 2011 and having an asset size of ` 500 crore and above; (iv) every Infrastructure Debt Fund Non-Banking Finance Company (IDF-NBFC) registered with the bank under the provisions of RBI Act, 1934; (v) every Non-Banking Finance Company Micro Finance Institutions (NBFC-MFIs) registered with the bank under the provisions of RBI Act, 1934 and having an asset size of ` 500 crore and above; (vi) every Non-Banking Finance Company - Infrastructure Finance Company (NBFC-IFC) registered with the bank under the provisions of RBI Act, 1934 and having an asset size of ` 500 crore and above.

10 (2) The Category of NBFCs as mentioned at points (i) to (vi) above are hereafter referred to as applicable NBFCs , for the purpose of these Directions. Specific directions applicable to specific categories of NBFCs registered as NBFC-Factors, 5 IDF-NBFCs and NBFC-MFIs are as provided for under respective Chapters in these Directions. (3) These Directions, except the provisions of paragraph 23 of these directions, shall not apply to a non-banking financial company being a Government company as defined under clause (45) of Section 2 of the Companies Act, 2013 (Act 18 of 2013) and not accepting / holding public (4) These Directions consolidate the regulations as issued by DEPARTMENT of Non-Banking Regulation, RESERVE bank of INDIA .