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

Amendments in / additions to forex guidelines

Reserve Bank of India (RBI) has amended various forex guidelines. This article lists out some of the such recent amendments. What are the updates in the existing guidelines? Previous guidelines Revised guidelines Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. Persons resident outside India that maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016 may purchase or sell dated Government Securities / treasury bills and non-convertible debentures / bonds and commercial papers issued by an Indian company. The amount of consideration paid for the purchases shall be out of the funds held in the said rupee account. The balance...
Post a Comment
Read more

FX Global Code

Reserve Bank of India (RBI) has signed its renewed Statement of Commitment (SoC) to the FX Global Code.  What is FX Global Code? FX Global Code is a set of global principles of good practice in the foreign exchange market. The Code contains 55 principles that provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. The principles cover ethics, governance, execution, information sharing, risk management and compliance as well as confirmation and settlement. The establishment of the Code was facilitated by the Foreign Exchange Working Group (FXWG), which operated under the auspices of the BIS Markets Committee.  The Code was developed by a partnership between central banks and market participants from around the globe and was first published in 2017. The Code promotes a robust, fair, liquid, open, and appropriately transparent market in which a diverse set of market participants, supported by resilient infras...
Post a Comment
Read more

Nomination for demat accounts and mutual fund folios

Securities and Exchange Board of India (SEBI) had revised the guidelines on nomination for demat accounts and mutual fund folios.   Which entities are covered by the guidelines? The following regulated entities (REs) are covered by the guidelines – Asset Management Companies (AMCs) of Mutual Funds (MFs) and their Registrars to an issue and share Transfer Agents (RTAs)  Association of Mutual Funds in India (AMFI)  Recognized Depositories  Registered Depository Participants (DPs) What are the guidelines on nomination facility? Nomination shall be mandatory for single holding and optional for jointly held accounts / folios. However, an investor having single holding / account / folio can opt-out of nomination, either online or through physical / offline mode. In case a joint account / folio becomes single holding, post the demise of holders, either nomination or ‘opt-out’, is mandatory. Investors shall have the option to specify guardians when nominees are minors....
Post a Comment
Read more

Nomination Facility in Banks

Reserve Bank of India (RBI) has issued directions on nomination facility in deposit accounts, safe deposit lockers and articles kept in safe custody with the banks. What is the legal framework for nomination facility in banks? Banking Regulation Act, 1949 (BR Act) contain provisions on nomination facility in banks. Section 45ZA – Nomination for payment of depositors' money  Where a deposit is held by a banking company to the credit of one or more persons, the depositor / all the depositors together, may nominate one person to whom in the event of his / their death, the amount of deposit may be returned by the banking company. Where the nominee is a minor, the depositor shall appoint any person to receive the amount of deposit in the event of his death during the minority of the nominee. Section 45ZC – Nomination for return of articles kept in safe custody with banking company  Where any person leaves any article in safe custody with a banking company, such person may nominate ...
Post a Comment
Read more

Recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)

Reserve Bank of India (RBI) has invited applications for recognition of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs). What is the basis of Self-Regulatory Organisations (SROs) for Non-Banking Financial Companies (NBFCs)? Reserve Bank of India (RBI) had issued ‘ Omnibus Framework for recognition of Self-Regulatory Organisations for Regulated Entities of the Reserve Bank ’ dated March 21, 2024, wherein broad parameters, viz., objectives, responsibilities, eligibility criteria, governance standards, application process, etc., were specified. It was also stated that other sector-specific guidelines like number of SROs, membership, etc., shall be issued separately whenever a sectoral SRO is intended to be set up. RBI has now invited applications for recognition of SROs for the NBFC sector under the aegis of the aforesaid omnibus framework.  What are the membership criteria for the SRO for NBFCs? The SRO for NBFC sector is primarily envisaged for NBFCs...
Post a Comment
Read more