Skip to main content

Appointments to be made by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to make various appointments for efficient operations. This article lists out some of the important appointments to be made by the Base Layer NBFCs (NBFC-BL).

Key Managerial Personnel (KMP)

Companies Act, 2013

  • Section 203(1) – Every company belonging to such classes of companies as may be prescribed shall have the following whole-time KMP –
    • Managing director, or Chief Executive Officer or manager and in their absence, a whole-time director
    • Company secretary
    • Chief Financial Officer

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

  • Rule 8 – Every listed company and every other public company having a paid-up share capital of ₹10 crore or more shall have whole-time KMP.
  • Rule 8A – Every private company with a paid up share capital of ₹10 crore or more shall have a whole-time company secretary.

Principal Nodal Officer / Grievance Redressal Officer

Reserve Bank - Integrated Ombudsman Scheme, 2021 dated November 12, 2021

  • Para 18(2) – Regulated Entity (RE) shall appoint a Principal Nodal Officer at their head office who shall not be a rank less than a General Manager or an officer of equivalent rank and shall be responsible for representing the RE and furnishing information on behalf of the RE in respect of complaints filed against the RE. The RE may appoint such other Nodal Officers to assist the Principal Nodal Officer as it may deem fit for operational efficiency.

Reserve Bank of India (Digital Lending) Directions, 2025 dated May 08, 2025

  • Para 11(i) and 11(ii) – RE, and the Lending Service Provider (LSP) which has an interface with the borrower, shall designate nodal grievance redressal officers to deal with digital lending related complaints / issues raised by the borrower.

Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023

  • Para 5.10.1 of Annex XIII – With regard to outsourcing of financial services by NBFCs, Grievance Redressal Officer shall ensure that genuine grievances of customers are redressed promptly without involving delay.

Designated Director and Principal Officer 

Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016

  • Para 3(a)(vii) and Para 6 – Designated Director means a person designated by the RE to ensure overall compliance with the obligations imposed under chapter IV of the Prevention of Money Laundering (PML) Act and the Rules and shall include managing director or a whole-time director, duly authorized by the Board of Directors.
    • The name, designation and address of the Designated Director shall be communicated to the Financial Intelligence Unit-India (FIU-IND).
    • The name, designation, address and contact details of the Designated Director shall also be communicated to the Reserve Bank of India (RBI).
    • In no case, the Principal Officer shall be nominated as the 'Designated Director'.
  • Para 7 – Principal Officer shall be responsible for ensuring compliance, monitoring transactions, and sharing and reporting information as required under the law / regulations.
    • The name, designation and address of the Principal Officer shall be communicated to the FIU-IND.
    • The name, designation, address and contact details of the Principal Officer shall also be communicated to the RBI.

Other appointments

Master Directions on Fraud Risk Management in Non-Banking Financial Companies (NBFCs) (including Housing Finance Companies) dated July 15, 2024

  • Para 5.2 – NBFCs (with asset size of ₹500 crore and above) shall establish suitable nodal points / designate officers for reporting incidents of fraud to Law Enforcement Agencies (LEAs) and for proper coordination to meet the requirements of the LEAs.

Master Direction - Information Technology Framework for the NBFC Sector dated June 08, 2017

  • Para 2(b) – NBFCs may designate a senior executive as the Chief Information Officer (CIO) or in-Charge of IT operations whose responsibility is to ensure implementation of IT Policy to the operational level involving IT strategy, value delivery, risk management and IT resource management.

Reserve Bank of India (Digital Lending) Directions, 2025 dated May 08, 2025

  • Para 17(iii) – The Chief Compliance Officer of the RE or any other official designated by the Board of the RE for the purpose shall certify that the data on Digital Lending Apps / Platforms (DLAs) submitted by them on the Centralised Information Management System (CIMS) portal of RBI is correct and the DLAs are compliant with all the extant regulatory instructions, including the provisions of these Directions.
  • Para 17(iv) – The Chief Compliance Officer / other official designated by the Board of the RE shall certify the following aspects –
    • DLAs have link to RE’s website where further information about the loan products, the lender, the LSP, particulars of customer care, link to Sachet Portal, privacy policies, etc. can be accessed by the borrower.
    • DLAs (in case owned by LSP), have appointed a suitable nodal grievance redressal officer to deal with digital lending related complaints / issues raised by the borrower, details of which are prominently available on the respective DLA.
    • Data collection and storage by DLAs is in compliance with para 12 and 13 of these Directions and other statutory and regulatory requirements.
    • The DLA’s particulars submitted by the RE are also suitably disclosed on the RE’s website as required under para 8(iv) of these Directions.


References

Government of India. (2014, March 31). 'Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014'. Retrieved from https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/rules.html

Government of India. (n.d.). 'Companies Act, 2013'. Retrieved from https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=NTk2MQ==&docCategory=Acts&type=open

Reserve Bank of India. (2016, February 25). 'Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on November 06, 2024)'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/master-direction-know-your-customer-kyc-direction-2016-updated-as-on-may-04-2023-lt-span-gt-11566

Reserve Bank of India. (2017, June 08). 'Master Direction - Information Technology Framework for the NBFC Sector'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/master-direction-information-technology-framework-for-the-nbfc-sector-10999

Reserve Bank of India. (2021, November 12). 'RESERVE BANK - INTEGRATED OMBUDSMAN SCHEME, 2021'. Retrieved from https://website.rbi.org.in/documents/87730/39016390/RBIOS2021_amendments05082022.pdf

Reserve Bank of India. (2023, October 19). 'Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 (Updated as on February 27, 2025)'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/master-direction-reserve-bank-of-india-non-banking-financial-copany-scale-based-regulation-directions-2023

Reserve Bank of India. (2024, July 15). 'Master Directions on Fraud Risk Management in Non-Banking Financial Companies (NBFCs) (including Housing Finance Companies)'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/master-directions-fraud-risk-management-in-non-banking-financial-companies-nbfcs-including-housing-finance-companies-

Reserve Bank of India. (2025, May 08). 'Reserve Bank of India (Digital Lending) Directions, 2025'. Retrieved from https://website.rbi.org.in/web/rbi/-/notifications/reserve-bank-of-india-digital-lending-directions-2025


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Report of the Committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector

Reserve Bank of India (RBI) has released the report of the committee to develop a framework for responsible and ethical enablement of artificial intelligence (FREE-AI) in the financial sector. Committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector In the financial sector, Artificial Intelligence (AI) has the potential to unlock new forms of customer engagement, enable alternate approaches to credit assessment, risk monitoring, fraud detection, and offer new supervisory tools. At the same time, increased adoption of AI could lead to new risks like bias and lack of explainability, as well as amplifying existing challenges to data protection, cybersecurity, among others. To encourage the responsible and ethical adoption of AI in the financial sector, the committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector (Chairperson: Dr. Pushpak B...
Post a Comment
Read more

Continuous Clearing and Settlement on Realisation in Cheque Truncation System (CTS)

Reserve Bank of India (RBI) has issued direction on continuous clearing and settlement on realisation in Cheque Truncation System (CTS). What is Cheque Truncation System (CTS)? Cheque Truncation System (CTS) involves halting the physical movement of the cheque and its replacement by images of the instrument and the corresponding data contained in the MICR line.  In CTS, 3 images are taken of each cheque – front Gray Scale, front Black & White and back Black & White. MICR (Magnetic Ink Character Recognition) is a 9-digit code printed at the bottom of cheques using magnetic ink – first 3 digits indicate City Code, middle 3 digits indicate Bank Code and the last 3 digits indicate Bank Branch Code. Only CTS-2010 standards compliant instruments can be presented for clearing through CTS. The presenting banks which truncates the cheques need to preserve the physical instruments for 10 years. From when will the continuous clearing and settlement on realisation in CTS be implemented...
Post a Comment
Read more

Non-Fund Based Credit Facilities

Reserve Bank of India (RBI) has issued directions on non-fund based credit facilities. To whom shall the directions be applicable? The directions shall apply to the following Regulated Entities (REs) for all their Non-Fund Based (NFB) exposures such as guarantee, letter of credit, co-acceptance etc. Commercial Banks (including Regional Rural Banks and Local Area Banks) Primary (Urban) Co-operative Banks (UCBs) / State Co-operative Banks (StCBs) / Central Co-operative Banks (CCBs) All India Financial Institutions (AIFIs) Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs) in Middle Layer and above, only for the issuance of Partial Credit Enhancement. The directions shall not apply to the derivative exposures of a RE. Which NFB facilities are permitted to be issued by RE? RE shall issue a NFB facility only on behalf of a customer having funded credit facility from the RE. However, this shall not be applicable in respect of – Derivative contracts entered int...
Post a Comment
Read more

RBI’s Monetary Policy (August 06, 2025): In A Nutshell

The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on August 06, 2025. Here are some of the highlights of the monetary policy announcement. Rates   Change Rate Policy repo rate Unchanged 5.50% Standing deposit facility (SDF) rate 5.25% Marginal standing facility (MSF) rate 5.75% Bank rate 5.75% Monetary policy stance Monetary policy stance unchanged as ‘neutral’. Domestic Economy  Real GDP growth for 2025-26 is projected at 6.5%. CPI headline inflation declined for the eighth consecutive month to a 77-month low (since January 2019) of 2.1% in June, driven primarily by a sharp decline in food inflation. Food inflation recorded its first negative print since February 2019 at (-) 0.2% in June. CPI inflation for 2025-26 is projected at 3.1%. India’s current account deficit (CAD) moderated to 0.6% of GDP in 2024-25 from 0.7% of GDP in 2023-24 due to robust services exports and strong remittances receipts despite higher merchandise trade deficit. As on Augus...
Post a Comment
Read more

Committees to be constituted by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to constitute various committees for effective corporate governance. This article lists out some of the important committees to be constituted by the Base Layer NBFCs (NBFC-BL). Board of Directors Applicability Companies Act, 2013 Section 149(1) – Every company shall have a Board of Directors. Composition of the Board Companies Act, 2013 Section 149(1) – The Board of Directors shall consist of individuals as directors – Public company – minimum 3 directors Private company – minimum 2 directors One Person Company – minimum 1 director  Maximum 15 directors (more than 15 directors may be appointed after passing a special resolution) Section 149(4) – Every listed public company shall have at least 1/3rd of the total number of directors as independent directors. Companies (Appointment and Qualifications of Directors) Rules, 2014 Rule 3 – The following companies shall appoint at least 1 woman director – Every listed company Every other...
Post a Comment
Read more